Page 535 - SSB Interview: The Complete Guide, Second Edition

Global economic slowdown:
The fall in the value of its currency affects the trade in a country. It

mainly affects the stock market. China faces a major slowdown in the

trade and weak commodity prices. The International Monetary Fund
forecasted that global growth would reduce to one-third by January

2019. Other emerging markets like India and Brazil are affected by this.

Lack of participation of FII:

By the starting of this year itself from 1 January to 20 January, Foreign

Institutional Investors (FII) sold their shares in the domestic market
worth `7,146 crores, whereas the Domestic Institutional Investment

(DII) stood at a total buying worth `9,129 crores during the same period.

Effects on Economy

Foreign imports will increase
Inflation

Lack of investment

Increased interest rates in banks

Decrease in number of consumers for a product

Fall in growth of economy

Mitigations to enhance value of the Rupee in the

Global Market

Handling trade deficit properly:

As mentioned above, the US has the widest trade deficit. But they export

products as much as they import them. In a way, trade deficit is a good
way for exporting products from a country. India has projected a good

rise in its exports since 2017 where manufacturing industries are the