Category: World Current Affairs | Last updated: 2026-09-18

When a country's currency significantly depreciates against major international currencies like the US Dollar or Euro, it typically leads to:

A) Increased purchasing power for imports and cheaper foreign travel.
B) More expensive imports and cheaper exports, potentially boosting domestic industries.
C) A decrease in the cost of foreign debt repayment for the country.
D) Greater foreign direct investment inflows due to increased confidence in the economy.

Explanation

Currency depreciation means that more local currency is needed to buy foreign currency. This makes imports more expensive, as foreign goods cost more in local currency. Conversely, it makes exports cheaper for foreign buyers, potentially increasing demand for domestically produced goods and boosting export-oriented industries.

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