Indian Rupee had hit a fresh record low, the Rupee opened at 70.22 versus the US dollar. •In wake of the Turkey crisis, the Indian currency started off the session on a weak note.
• The Indian currency touched an all-time low of 70.08 against the US dollar, while marking depreciation of around 10 per cent in 2018.
The fall came majorly due to a drop in Turkish Lira, which helped the US dollar to gained strength on the back of fears that economic crisis in Turkey could spread to other global economies
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CURRENT ACCOUNT DEFICIT
INFLATION
STUDENTS
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FOREIGN DIRECT INVESTMENT
Continuous downfall in Indian rupee is worrisome for imported goods as the cost of imports will go up. Currently, India imports around 80 per cent of its crude requirement. The rupee downfall will expand India’s import bill and will eventually be contributing to the inflation.
In a scenario, where inflation further goes up then there are chances that RBI may hike rates resulting your EMIs outflow.
The current low is also a bad news for students aspiring to study abroad, as lower rupee value will lead to higher education costs. Travelling to out of India will also become expensive.
he weakening rupee will make crude oil, fertilisers, medicines and iron ore, which India imports in large quantities, costlier. Though these items are not for your daily consumption, they impact your finances indirectly. For example, since India imports roughly 70 percent of crude oil it consumes, a weak rupee will influence petrol and diesel prices. The already high prices may further rise.
Crude palm oil is also one of the largest imported commodities by India. • This decides prices of other edible oils. Therefore any rise in crude palm oil prices will raise retail prices of edible oils as well
FMCG, or fast moving consumer goods, such as soaps, detergents, deodorants and shampoos, of which crude oil is an input, are likely to become more expensive. Pulses and oil, which account for a large part of India’s imports, will also be affected. Students who have taken loans to fund their foreign degrees will also bear the brunt. Education loans are usually in rupees, but as students pay their expenses in a foreign currency, the cost of education and stay will increase.
Jobs may most likely be paying less as well. For industries dependent on heavy amount of imports will have to face a higher cost of operation. This may in turn reflect with shrinking pay cheques for employees. The falling rupee is bad news for Indians off to vacations to a foreign country. Air fares may go up due to an increase in fuel surcharge. The stay will be getting costlier as well. Also, shopping will burn a hole in the pocket.
The depreciation of rupee will impact the automobile sector in three ways. First, input costs will rise, as these companies use imported components. Second, some companies will have to pay higher royalty to foreign parent firms. Third, many have foreign currency loans in the form of external commercial borrowings and foreign currency convertible bonds. Therefore, more or less all auto companies will have to increase prices.
The imported paperback, your favourite pizza and the latest laptop will also become more expensive. Electronic consumer goods such as computers, televisions, mobile phones, etc, with imported components will also become costlier.
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