Indian Rupee Record Low: The Indian Rupee has slipped to a record low of 90.13, which was at 89.9475 on Tuesday. Its effect is also visible on the stock market. Weakness of rupee can affect the common man also, know how it affects your budget.
Rupee vs Dollar: The Indian rupee reached 90.13 against the dollar on Wednesday, December 3, its highest ever record low. A day earlier on Tuesday, the rupee was at 89.9475. As the dollar strengthened, Indian stock market also came under pressure, Nifty went below 26,000 and Sensex fell by about 200 points. Uncertainty increased regarding trade, FII selling and India-US trade deal. All this has weakened the rupee. Experts believe that if the tariff conditions are tightened in the trade deal, then this weakness of the rupee may increase further. If it continues like this, its impact can be seen on your pocket, monthly budget, shopping and many other things in your life. Know how such a fall can affect you…
Traveling abroad can be expensive
Whenever the rupee falls against the dollar, the overall cost of going abroad increases. Flight tickets, hotel booking, taxi, food, everything is decided in dollars. Due to low value of rupee, you may have to pay more money for the same hotel or ticket.
Imported products like iPhone, laptop and TV can be expensive
India imports many electronic products like iPhone, high-end laptop or smart TV in dollars. The fall of rupee means that companies can increase their prices, because they may have to pay more rupees than before.
Kitchen expenses may increase
We buy cooking oil, some varieties of pulses and many food items from outside. All these are traded in dollars. The weakness of the rupee has a direct impact on your kitchen.
Pressure on petrol and diesel may increase
India buys crude oil in dollars. If the rupee weakens, the pressure on the government to increase oil prices increases, due to which petrol and diesel may also become expensive. However, the government manages these things as per its own and it is not necessary that these things be expensive every time.
Fees and expenses of children studying abroad increase
The increasing fees of children growing up abroad is also affected by this. Children studying in countries like America may face less money sent every month as the rupee falls. If earlier it used to cost Rs 89,000 to send $1,000, now it will cost more than Rs 90,000. Annual expenses can increase into lakhs.
Sending money to children or relatives living abroad will be expensive
Depreciation of rupee may increase remittance charges and the conversion rate may go against you. This means that money sent from India will seem a little more expensive than before. For families, this can spoil the monthly fixed budget.
Cost of companies running on imports will increase
Many industries in India like auto parts, pharma, mobile manufacturing are dependent on imports. Their costs increase when the dollar strengthens. Its impact falls on customers after some time, because companies add the increased cost to the prices.
Indirect impact may be seen on EMI
When inflation increases due to fall of rupee, RBI can also increase the rates. Due to this, there is a possibility of increase in EMI of home loan, auto loan and personal loan. This effect does not happen immediately, but your EMI may increase in a few months.
Gold prices may rise
When the dollar strengthens, gold usually rises. Gold prices in India depend on both dollar and rupee. Therefore, if the dollar remains strong for a longer period, gold can easily make new records. This situation can be beneficial for those who have gold SIP.
Stock market decline may continue
When FIIs see the rupee weakening, they start withdrawing money from the Indian market. Due to this, Nifty-Sensex falls and the value of small investors decreases. If your portfolio seems to be falling every day, it is part of the same chain reaction. However, for long-term investors this is also considered a buying opportunity.
Forex cards and international payments will be expensive
Students and travelers who use Forex cards will have to buy dollars at higher rates. If someone had loaded the card a week ago, he would have paid less money than he does today. Therefore, now whoever is planning a travel, should check the rates again and again.
Impact on imported car and EV batteries
The car industry imports many parts from outside. EV batteries, chips and many electronic circuits are completely imported. As soon as the rupee falls, its prices start increasing and those buying a new car may have to pay more.
Pressure on small traders and shopkeepers
Traders who sell imported goods may see their costs increase. Now the same goods are costing more than before, but customers want to pay the old price. Due to this, the profits of small businessmen reduce and running the business becomes difficult.
This is a beneficial time for NRI families
If you have any family living abroad and sending money to India, then every dollar sent is giving more rupees at this time. That means the income of NRI family can increase. This is one of the few positive factors of rupee weakness.
danger of rising inflation
Depreciation of rupee gradually makes everything expensive. Food items, milk, vegetables, school expenses, gas, clothes etc. are all affected by it.
Disclaimer: All the effects given in this article are just estimates. Actual prices, policies, market movements and your personal expenses may vary depending on time, circumstances and government decisions. This article has been written for general information purposes only. This is not financial advice of any kind. Before taking any decision related to investment or expenditure, consult your financial advisor.
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