Who gets hurt the most due to falling rupee?

Rupee gains against dollar ahead of key inflation data

The rupee has fallen to a fresh all-time low declining sharply against the US dollar to close at 73.78. A weaker rupee has made crude oil, electronics, precious metals, medicines and iron ore, which India imports in large quantities, costlier. Though these items are not for your daily consumption, they impact your finances indirectly.

Who gets hurt the most due to falling rupee?

This fall in rupee’s value against the US dollar is called rupee depreciation. The falling rupee spells bad news for some. Take a look:

Foreign education: A depreciating rupee increases the cost of foreign education. Students who take foreign loans to fund their dream, feel its pinch the most. When the rupee was around 64 per dollar in September 2017, a $ 100,000-dollar management programme cost students Rs 64 lakh. A year later, the same course cost the students Rs 73 lakh, a whopping increase of Rs 10 lakh.

The students risk facing shortage of funds as the loan are taken according to the initial requirements. In such a case, either the students’ personal contribution will have to increase, or they will have to ask the bank to increase the loan amount.

Foreign Travel: A weak rupee can play spoilsport with your vacation plans to the United States or other international destinations. The fall in the rupee means now you have to shell out more money than before for air tickets or settle for a cheaper accommodation or reduce the number of travelling days. However, holiday package booked in advance remain safe. Those who are in the planning stage should opt for countries where rupee still holds its value comparatively.

Medical Cost: For people needing medical care, a fall in rupee is a bad news. A depreciation in rupee pushes up the cost of medical care. This is because a considerable chunk of medical equipment is imported. Close to 40 per cent of hospital bill is due to use of Hi-Tech medical equipment and 80 per cent of such equipment is imported. From cardiology to cancer to orthopaedic implants and consumables, imported equipment is used everywhere.

Car Buyers: Auto manufacturers are expected to hike prices as the depreciation of rupee will raise their input costs as these companies use imported components. Moreover, many auto companies have foreign currency loans in the form of external commercial borrowings and foreign currency convertible bonds.

Domestic Consumption: Electronic consumer goods such as computers, televisions, mobile phones etc, that have imported components will become costlier.