How weak Rupee will affect common man?

Editor - CoolAvenues | June 11,2013 10:26 am IST

The Rupee hit a lifetime low Vs dollar. Let’s take a sneak-peak at how falling rupee will affect the budget and personal finances of common man.

1. Increase in Petrol and Diesel Price:
India is the largest importer of crude oil in the world. With Rupee trading at all time low oil companies will have to shell out more for importing crude oil. The Petrol and Diesel prices in India are de-regulated by India government, thus oil companies will put the burden of increased prices on the common man.

2. Increase in Gold prices:
India is one of the largest consumers of the precious metal. The recent slash in gold prices has eventually resulted in more gold being purchased across the country. As gold and silver are priced in USD in the international markets the metal would become costly for Indian buyers.

3. Increase Cost of abroad travels and Education
A good number of students from India go abroad for studies every year. Due to weakness in Rupee students will have to shell out more for going abroad. Similarly, tourist from India travelling abroad will have to put a cap on their spending while travelling.

4. More Profits to IT companies
IT firms earn a majority of revenues in dollars from foreign clients. The weakness in rupee will help the IT companies gain, as they are paid for projects in dollars. Indian IT behemoth, Infosys get over 75 per cent of its business from North America and Europe, thus a weak currency would benefit them.

5. Loss for FII’s
Indian markets largely depend on Foreign Institutional Investor inflows. FII’s holding in many blue chip stocks is at all time high and they have poured in more than $30 billoin in past one year. Now if they want to liquidate position and convert back the money in $ they will earn less dollars. Weaker rupee would also affect manufacturing sector that imports raw material from abroad, as it will be expensive to import these goods now.


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