Rupee depreciation

A fall in the value of the rupee against another currency. Take a move from ₹80 to ₹84 to the dollar, levels picked for clean arithmetic rather than as a quote. It is normally reported as a 5% depreciation, because the rupee price of a dollar rose 5%. Measured on what a rupee actually buys, the fall is 4.8%, since 80 parts in 84 of the old value survive. Those are two different questions and the gap between them widens as the move gets larger, so a percentage here is worth nothing until you know which one it answers.

Over the long run the rupee tends to weaken against the dollar, and that tendency is largely an inflation differential: a currency in a higher-inflation economy loses value against one in a lower-inflation economy over time, which is the purchasing power parity idea in its loosest form.

For an investor the practical consequence is that dollar returns from Indian equities are lower than rupee returns over long periods, and any comparison of Indian and American index returns has to state which currency it is in.

Depreciation isn't a crisis. Rapid depreciation is.