If Foreign Exchange rate changes from \(1$=80 \) to \(1$ \) = 83 at a given point of time, what does this indicate for Indian currency ?

Depreciation of currency

The correct answer is option (2) : Depreciation of currency

The change in the exchange rate from \(1$=80 \) to \(1$ \) = 83 indicates currency depreciation for the Indian Rupee because it now takes more Rupees to purchase 1 US Dollar. In other words, the value of the Indian Rupee has decreased in relation to the US Dollar, which means that the Rupee has weakened. This can happen due to various economic factors, including inflation, trade imbalances, or changes in market sentiment, which result in a decrease in the exchange rate. Depreciation can make imports more expensive and exports more competitive but may also lead to higher prices for imported goods.