It is important to note that the Indian rupee is losing value versus the dollar on a daily basis, which is causing a lot of concern in corporate circles. In the post-Covid world of 2022, the value of INR has consistently fallen against the dollar. It is crucial to realize that the Indian Rupee has been losing value against the dollar for a long time. Financial analysts have predicted that if depreciation continues, the Indian rupee may go below the 81 units per dollar threshold before the year is over. One of the main causes of this is rising inflation, which is having an impact on the Indian economy.
An online survey reveals that the majority of respondents think rupee devaluation will negatively affect their ability to purchase goods and services, even if the value of the Indian rupee against the U.S. dollar reached a record low at 80 to USD 1.
In the foreign exchange market, a decline in the rupee’s value relative to the dollar signals a weakening of the rupee. The depreciation also impacts the imports by making them more costly. As a result, India will be required to pay more when importing goods from the United States or any other nation because the payment is made in dollars, meaning that less expensive imports would cost more. It has become more expensive for Indian citizens to travel abroad, study at foreign universities, buy fuel, and purchase basic necessities.
Additionally, a falling rupee would have a negative effect on them and their families due to rising food, medication, and healthcare expenditures and negatively hurt their quality of life. A prompt decision is required to stop the rapidly deteriorating economic situation and the fast depreciation of the rupee against the dollar. To remove the “installed system,” actions would be taken on a war-footing basis.
(The views expressed by the author in the article are his/her own.)