INR vs Dollar, Indian Rupee Falling, Indian Rupee against Dollar, Indian Rupee Falling Impact, INR Falling Impact Indian Economy: The Indian rupee on Friday touched above the 84 per US dollar mark. While writing the 1 US Dollar was equal to Rs 84.38. It is among the all-time lows for India's currency as compared to the US Dollar. The fall in the rupee came amid outflows from foreign institutional investors, concerns over a surge in oil prices, and higher demand for the greenback from foreign banks. Now, the question what Indian Rupees falling mean for the Indian Economy, or does the INR falling impact India? True Scoop talked to CA Shashi Bhushan who has been serving at the Institute of Chartered Accountant's Jalandhar Branch for the last 9 years and held positions as Treasurer, Secretary, and Vice Chairman and Became Chairman in 2022-23. Below is an excerpt of what he said on INR's falling impact on the Indian Economy-
"The dollar is performing strongest as compared to the INR in recent times. If we look at the data of the past 2 to three years, the rupee fell to 82 in the past as well and now it is at 84. Therefore, we can say that the Indian Rupee is somewhat stable. India imports more as compared to exports. The major imports in India are fuels like crude oil. This will increase the cost in India. Due to the increase in cost, the outflow will increase. It will affect the Indian economy negatively. Due to the fuel prices, it will also affect the cost of other goods," said CA Shashi Bhushan.
Bhushan further said, "It may benefit the exporters. The reason is inflation is not able to be controlled in India. This is the reason why RBI has not reduced its basic rates. Interest rates and base rates are all stable. Therefore, inflation is still at a challenging level. This is the reason why prices are not being decreased. As compared to other currencies, INR has performed better but as compared to the US dollar, its performance is low. Therefore, it will impact the Indian Economy. The crude oil rates have been decreased but oil companies have not reduced their rates."
What commodities are expected to get more expensive?
CA Shashi Bhushan explained, "Goods like imported electronic items or imported raw materials will get more expensive. Even plastic items that are imported into India will get more expensive. Where there is transportation involved, the fuel factor will also kick in. It can be said that it will impact almost everything.
"The reason why the Dollar is strengthening and the INR is weakening is that India is an import-deficit country. Dollars that come to India are less as compared to dollars that go out in exports. Whenever any currency's inflow is low and outflow is high, then our currency's performance will be poor. The deficit of imports and exports is increasing. As our economy grows, GDP grows, then consumption also grows, and then imports grow as well. It increases the exchange rate between the dollar and the rupee," added Bhushan.
"As compared to neighbouring countries like Pakistan and Sri Lanka, the Indian currency's performance is stable and hence it really helps policymakers and businessmen to make their decision. It is expected that in the future, the rupee is expected to perform stronger. The comeback of Trump will not mean that the rupee will perform better as his decision will be pro-American. But, it won't impact much on Indian currency. In Trump's new tenure, if he is able to resolve war or disputes, then the performance of markets will be stable and even better in some cases," CA Shashi Bhushan outlined.
What does it mean for NRIs?
"For NRIs, it is a good factor as they will be able to send more money. But, payments sent outside from here generally to students, it will be negative for them as they will have to pay more.