The rupee has had a weakening bias because of India’s consistent current account deficits (imports exceed exports). Corrections in exchange rate happen sporadically and that is when Indians feel the pain. But the impact is not uniform and depends on the demand and supply position in various sectors.
If you are…A consumer: Most of us who are already facing the brunt of inflation will see fresh price surges on all imported items.
An exporter: You can now sell more price-sensitive products by reducing rates. Alternatively, you may get more dollars on the same number of sales
A student in foreign college: You will need to draw a larger amount to pay the same fees
An outbound tourist: Many currencies have depreciated against the dollar, but you will still pay more as flights and hotel bookings are usually done in dollars
Read More:-How much salary will increase if 8th Pay Commission is implemented?
A freelancer: An assignment billed in dollars will get you more money. But you may have more competition as some other currencies have weakened more
An Indian investor with $ deposits: Value of holdings has gone up 7% in rupee terms An investor in US stocks: Dow Jones index has fallen 14% in 202, but in rupee terms the losses are lower at about 8%
What you can do as…
A consumer: Identify import substitutes. If not buying for the brand, you will find local alternatives
An outbound student: Visit your dentist, go for a haircut, shop for clothes and avail other such services before leaving. Look for cheaper remittance services
Read More:-Windfall Tax Cut On Diesel, Crude Oil And Jet Fuel Shipments
An outbound tourist: If destination country’s currency has depreciated more (like Turkey) you may get better deals by booking directly in that country
An investor in dollars: Wait for rate hike cycle to end. Rates have shot up but are likely to go up further, which means bonds and equities may get cheaper
A business owner: Bargain hard with international suppliers as they will be able to cut prices due to depreciation
A policymaker: Take countercyclical measures to encourage foreign investments by lifting restrictions
What RBI is doing to check slide….– Selling large amounts of dollars to support rupee
Read More:-ITR filing: 8 situations when you CANNOT use ITR-1 form (SAHAJ) for Income Tax Return
– Raising interest rates to make Indian investment attractive
– Removing reserve restrictions on dollar deposits with banks
– Allowing traders to make settlements in rupees to reduce dollar dependence
