Rupee To Dollar: How Does The Fall Of The Rupee Affect Your Money?
Rupee Inches Close To 80 A Dollar: Should you worry about the fall of Indian Rupee against dollar? Does this affect the common men? Let’s talk in detail!
Rupee Inches Close To 80 A Dollar
The rupee fell close to 79.88 against the US dollar on Thursday. It is nearby breaching the psychological value of 80. This is one of the results of the Russia-Ukraine conflict, global recession and after-life of COVID pandemic.
As a result of these global incidents, almost every country in the world is facing a political crisis as well as an economic crisis in different ways.
The Indian government & RBI are doing their best to deal with these issues but it will take time to balance the situation.
Meanwhile, let’s talk about how the fall of the rupee affects your money in detail.
How Does Dollar ($) Gain Authority?
Here are the simple equations:
- India’s imports from the US > India’s exports to the US (i.e. $ paid by India to US)
- India’s exports to the US > $ paid to India by the US
To close this deficit, India buys more dollars from banks. This is how authority for the US dollar gets established. High demand for commodities results in a higher value of the commodity.
How Does It Impact Your Money?
These situations make several products more expensive.
- Fuel – diesel, petrol, and cooking gas.
- Daily-use household items.
- Electronics like mobile phones, laptops, TVs.
- Household electricals and solar plates.
Impact of Foreign Affairs
Higher education in foreign countries will become more expensive as the currency depreciates. Travel to foreign destinations will also be costlier with the Rupee losing its value.
Who Benefits If The Rupee Falls To The Dollar?
People receiving remittances from relatives abroad will get more money in INR People who have existing investments in US stocks will hold shares of more value
RBI Steps In With Powerful Initiatives
Reportedly, the RBI is intervening in all foreign exchange markets, including spot, forward, and non-deliverable forward markets, and is likely to do so in the near future.
To deal with the situation, the Indian government is establishing more & more manufacturing hubs across the country. India is rapidly growing in the business & technology sector.
But it is obvious, nothing can be done overnight. So let’s wait and hope for the brighter future of India.