As the value of the Indian rupee continues to fall against the dollar, there is a risk that the price of imported goods in India, including fuel, will rise. With the US dollar trading at 80 rupees 4 paise on Thursday, experts believe that the dollar is unlikely to depreciate quickly against the Indian rupee.
According to them, the cost of Indian students going abroad to study will increase. Similarly, the expenditure of Indians traveling abroad for tourism or other reasons will also increase. When they buy dollars to spend abroad, they are forced to spend additional Indian rupees.
There has been an increase in the prices of commodities like cooking oil and gold. Similarly, as the cost of spare parts used in cars and mobile phones increases, customers have to spend more to buy cars and mobile phones.
The United States, which has already raised interest rates, is expected to raise interest rates by another percentage point soon to curb unprecedented inflation. As a result, the value of the dollar continues to increase against the various currencies of the world. The Reserve Bank of India is also trying to control inflation by raising interest rates. However, the ongoing interest rate hike in the US is considered to have a greater impact.
This is due to the high demand of dollar for export-import trade across the world. India’s demand for dollars has increased as imports are high at present. Import value increased due to rise in prices of fuel and cooking oil. As a result, the value of the Indian rupee is gradually depreciating.
Indian exporters are expected to benefit from a depreciating Indian rupee at the same time as prices of imported goods rise. Profits will increase as the rupee value of each dollar earned by them continues to increase. At the same time, exporters get an opportunity to reduce prices and increase their business. While Indian service companies continue to increase their exports in sectors such as IT, cotton garments, jewellery, food products, pharmaceuticals and leather goods are exported from India.
– Ganapathi Subramaniam from New Delhi.