The rupee’s value has dipped sharply this week. You know how it affects the common man when it comes to a rate of 68 rupees against the dollar?
Petrol and diesel prices
The fall in prices of petrol and diesel is likely to affect the rupee. Because the import rate will be significantly affected. The imports of crude oil can not be cut in India. If the rupee depreciates again, it is likely that the petrol and diesel prices will go up by 4%.
If the rupee depreciates and the petrol diesel price is rising, then price inflation will definitely get worse. Prices of essential commodities such as vegetables, fruits, cereals and more will be available. The price of the computer, smart phone and car with imported components will also cost you.
The depreciating rupee would also lead to an increase in interest rates. That means the RBI will be compelled to control inflation. In order to control inflation, interest rates must be increased.
Foreign travels and study abroad will be more expensive. 10,000 dollars a year ago was equal to 6.6 lakh. But now it is equivalent to Rs 6.8 lakh.
The rupee depreciation and the increase in crude oil prices will have a serious impact on the country’s economic growth. According to the Economic Survey in 2018, when oil prices go up to $ 10 a barrel, economic growth will slow down from 0.2 to 0.3%.
Investment will be withdrawn
With the fall in the value of rupee, foreign investors will start withdrawing money from Indian markets. This will be a major drop in the stock markets. In the past few days, the rupee has fallen because of the sharp fall in the Indian stock market.
The prices of FMCG products like soap and detergent will increase. This is due to the increase in crude prices and rupee value.