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Rupee below 81 mark: How it will impact you

The rupee opened at an all-time low of 81.18 on Friday after depreciating 39 paise
Last Updated 23 September 2022, 09:35 IST

The rupee slipped below the 81 mark against the US dollar for the first time in early trade on Friday before clawing back some of the losses on likely intervention by the Reserve Bank of India. The currency was weighed down by the strong American currency and risk-off sentiment among investors.

The local currency had fallen to a record low of 81.2250 earlier in the session, prompting the RBI to intervene.

What does it mean for you?

The most direct impact of a weak currency is felt on inflation. A weak rupee will make imports costlier. An importer would have to pay more rupees for the same product bought at a cheaper rate previously.

This simply means that consumers will have to shell out more money for products that are imported.

This is a big concern as India imports 80 per cent of its crude oil, which is sure to drive up the costs of several products. India is also dependent on imports for edible oil and fertilisers, which will add to inflationary pressures. The country is also one of the biggest importers of electronic items. With the festive season around the corner, consumers may have to lighten their pockets more after annual sales.

While it means bad news for importers, a weaker rupee makes exports more competitive in the world market. But this may also not be a good news, as a significant portion of items used to make gems and jewellery, petroleum products and other key export products in India, are imported.

However, the IT and pharmaceutical sectors are sure to benefit from a weaker rupee, as more than half of their income is earned in US dollars.

Those interested in foreign vacations will have to pay more as the rupee value depreciates. Similarly, students studying abroad will have to pay a larger amount of money for the same fees. For people employed in freelance projects and getting paid in US dollars will earn extra bucks.

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(Published 23 September 2022, 05:30 IST)

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