How is US Dollar rate affecting every Indian?

How is US Dollar rate affecting every Indian?
How is US Dollar rate affecting every Indian?
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How is US Dollar rate affecting every Indian?

When US dollar breached 71, another unexpected high, many people were in awe. Some exporters and NRIs were cherishing whereas some Indians willing to travel abroad are counting the budget again…  Whereas, For many, changing USD INR is rate is nothing but a number… they feel that the changes in dollar is not affecting them at all because, they are neither importer nor an exporter or not even willing to travel to US. But, sadly, that’s not true…

India has only one direct foreign currency i.e. USD / INR and every individual is getting affected by this rising dollar price.. Lets see how:

 

Inflated Imports including Gold

Cost of every imported good is increased with an increase in dollar rate. That makes imported goods costly. Gold rates are also impacted by the USD rates.

Increased Petrol / Diesel prices

India is a big importer of Oil and gas. With increased US dollar, it is likely that the government will increase Petrol and Diesel Prices.

Inflation

Increased oil and gas prices increase transport and food costs eventually increasing Inflation.

All this eventually lowers the standard of living

Impact on stock exchange

FIIs make headwind gains by selling in stock market at depreciated rupee. Further, this will lower the stock index.

Foreign education and Travel

Rising dollar rates will make your / your relatives’ foreign education or travel costly.

Fiscal Deficit and Budget

Indian economy already witnesses Fiscal deficit as the exports in India are much lower than the imports.. With the rising dollar, this deficit is likely to widen, ultimately increasing the cost of taxpayers.

Gainers

The people gaining in the rising dollar are those who will sell USD i.e. Exporters. This is also a good time for NRIs to convert their dollars in INR.



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About CA Janhavi Phadnis 78 Articles
Chartered Accountant and financial consultant. She has worked with corporates for 14 years with expertise in Forex-Treasury, Accounting, and Corporate Tax. She can be contacted at info.financepost@gmail.com

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