Rupee Vs Dollar: What will be the effect of falling rupee on common man? world heading towards recession

What will be the effect of falling rupee on common man?

The impact of the ongoing war between Russia and Ukraine and the ongoing Corona epidemic crisis for two years is clearly visible on the markets around the world. Its effect is being seen in India too. Rupee continues to depreciate against US dollar.

The impact of the ongoing war between Russia and Ukraine and the ongoing Corona epidemic crisis for two years is clearly visible on the markets around the world. Experts believe that a recession can knock once again in the world. Its effect is being seen in India too. Rupee continues to depreciate against US dollar. When the market opened on Wednesday, the rupee fell to a record low of 78.98 in early trade. Due to the continuous rise in the dollar index and expensive crude oil, the increasing trade deficit is weakening the rupee, but first let’s see what was the condition of the rupee against the dollar in the first 6 months of the year 2022.

Rupee Against Dollar in First 6 Months of 2022:

30 January 2022 $1 ₹75.05
28 February 2022 $1 ₹75.29
30 March 2022 $1 ₹75.83
30 April 2022 $1 ₹76.52
30 May 2022 $1 ₹77.60
30 June 2022 $1 ₹78.96

Now the question is, where will the continuously falling rupee stop? Yes. According to experts, due to the strength of the dollar index and expensive crude oil, the domestic currency is facing a double whammy, due to which the rupee is becoming weaker. At the same time, it is also a matter of concern that according to the estimates, by the end of July, the rupee may fall to the level of 79.5. The reason for this is being attributed to weak macro fundamentals and interest rate hikes by central banks around the world.

What things will be affected by the breakdown of the rupee, now they also know-

First of all, there is an effect of currency breakdown on the import of crude oil. India imports about 80% of crude oil. The rupee reaching 79 against the dollar means that the import of crude oil will be expensive, due to which the oil companies can increase the prices of petrol and diesel. Due to the cost of oil, the transportation cost will increase, whose direct effect will also be visible on your plate. Not only domestic but also the prices of imported edible oil will also increase.

The weakening of the rupee will have an effect on the small goods imported from abroad. The depreciating rupee will have a direct impact on TVs, refrigerators, mobile phones and other electronic items. Actually, many companies based in India import electronic items and parts for their products. In such a situation, if the import becomes expensive, then the increase in the prices of all these goods will be seen.

Not only living in India, but you may have to loosen your pocket even more for traveling or going abroad. After the weakening of the rupee against the dollar, more fees will have to be spent for hostel bills. On the other hand, most of the payments are done in dollars abroad, for which you will have to spend more money even in currency conversion.

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The impact of rupee depreciation will also affect India’s import bill. Wherever India pays in dollars, it will become expensive. Not only this, now it will become a problem for the corporate house also to take foreign loan. Many sectors of the economy – be it retail or realty – are mostly dependent on foreign debt. Indian companies can directly borrow from foreign companies under ECB at low interest rates, which have to be paid in dollars. Because of this, when the rupee weakens against the dollar, companies will have to pay more interest, due to which companies can increase the prices of their products.