Nowadays we used to hear about the falling of Rupee in front of Dollar, well majority of the people are not aware about the consequences of this falling down. Yesterday the current rate of 1 dollar is equal to 68.85 Indian rupee, but its not the actual trading value. Actual trading value in some country is more than 69 Rupee for 1 dollar. If the govt does not take any action then its sure by the end of September Dollar will be more than 75 Indian rupee. Anyway, common man have to suffer for this consequences.
How continuous depreciation of the Indian currency will affect the common man.
Importers/Exporters
Importers will strongly feel the pinch of falling rupee as they will be forced to pay more rupees on importing products. Conversely, a feeble rupee will bring delight to the exporters as goods exported abroad will fetch dollars which in return will translate into more rupees. Also, a weak rupee will make Indian produce more competitive in global markets which will be fruitful for India's exports.
Imported goods: Buying imported stuff will become a very costly affair. You will have to shell out extra on imported goods. For instance if you bought a product valued USD 1, you paid around Rs 54 (weeks ago) but you will now have to shell out close to Rs 63 for the same product.
Fuel price: A weak rupee will increase the burden of Oil Marketing Companies (OMCs) and this will surely be passed on to the consumers as the companies are allowed to do so following deregulation of petrol and partial deregulation of diesel. If the OMCs increase fuel prices, there will be a substantial increase in overall cost of transportation which will stoke up inflation.
RBI’s monetary policy: If the depreciation in rupee continues, it will further increase inflation. In such a situation RBI will have very less room to cut policy rates. No cut in policy rate will add to the borrower’s woes who are eagerly waiting to get rid of the high loan regime.
Students studying abroad: Students who are studying abroad will bear the brunt most owing to depreciating rupee. Expenses incurred towards the university/college fee as well as that of living will shoot up, thereby spelling a huge burden on the students.
Tourism: The depreciating rupee will surely be a dampener if you are planning your holiday abroad. Your travel charges as well as hotel charges will escalate drastically, let alone shopping and other miscellaneous spending activity.
Overseas Indians: Money saved is money earned. Depreciation of rupee is certainly a good news for the overseas Indians. Those working abroad can gain more on remitting money to their homeland.
Country’s fiscal health: A frail rupee will add fuel to the rising import bill of the country and thereby increasing its current account deficit (CAD). A widening CAD is bound to pose a threat to the growth of overall economy.
JOBS AND REMUNERATION: Every industry which is dependent on imports will have to face an increase in cost of production and operations. "In order to nullify the increase, these companies will have to rationalise costs within their control. One of this will be human resources. So, either lesser number of people will be hired or the salary bill will be kept constant or reduced,". However, it is a good time for industries which earn in dollars. "The information technology sector stands to gain, but global recessionary conditions may set off the impact"
controversy dnaindia.com
