Why rupee is depreciating 2017

The RBI has stressed it intervenes to smooth volatility in the forex market and does not target any level on the currency. It aggressively bought dollars last year as foreign investors flocked to India but economists are unsure if the intervention on the downside will be as strong. A weaker rupee helps exports and several believe the RBI may prefer it, and will hence influence how much further the rupee weakens, say economists. Negative real interest rates, potential GDP and earnings downgrades and rising inflation have also become headwinds for the currency, said economists.

Those who are still in the planning stage should consider alternative destinations, considering the upside the rupee has against some other currencies like the UK pound, Canadian dollar, South African rand or New Zealand dollar. Kale said when the rupee depreciates, short-haul trips to destinations like Singapore, Malaysia, Thailand, Dubai, and Hong Kong see rising interest.

The other direct impact is fuel price as India is heavily dependent on imports for crude oil , and a depreciating rupee makes imports expensive. However, international oil prices also play a role in determining fuel prices. Madan Sabnavis, chief economist at Care Ratings, said it is very clear that the government is not willing to reduce its duties for now or provide a subsidy on fuel. The price paid by a consumer includes taxes like the excise duty by the central government, sales tax or value added tax by state governments as well as dealer commission.

Hence, unless the government reduces the taxes on fuel, consumers will be hit. While you may not notice the impact of rising fuel prices on a daily basis, this effectively increases the amount you spend on fuel every month for the same amount of travel.

The spending on official transport or public transport is in addition to that. Travel cannot be stopped altogether, but people are being wary of the expenses for sure. Whatever the price, you cannot escape this part of spending," he said. Rising fuel prices, in turn, increase the cost of transportation of various goods, from manufactured products to agricultural produce.

Stocks Dons of Dalal Street. Live Blog. Stock Reports Plus. Candlestick Screener. Stock Screener. Market Classroom. Stock Watch. Market Calendar. Stock Price Quotes. Markets Data. Market Moguls. Expert Views. Technicals Technical Chart. Commodities Views News. Forex Forex News. Currency Converter. Rate Story. Ltd said depending on the time horizon, you can invest in equity schemes or you could open an account and save in a liberalised remittance scheme LRS and transfer money in the foreign currency, when required.

With the festive holiday season around the corner, taking a holiday abroad may have been on your mind. Also, remember that your credit card repayments would be made in rupees. If there has been a depreciation between when you actually spent the money and the time when you are making your repayments, then you may end up repaying more.

In order to avoid overspending, you could consider opting for prepaid forex cards which are new entrants in the travel currency market. These cards allow you to withdraw cash in foreign currency when you are travelling abroad. They are a type of pre-paid debit cards.

You can then use these cards while abroad for everything from paying your taxi bill to shopping, as well as use them to withdraw cash from local ATMs," said Adhil Shetty, chief executive officer, Bankbazaar, a financial services marketplace. Rupee depreciation usually results in rising fuel prices as India depends on imports for crude oil and a drop in rupee value makes imports expensive.

Global oil prices play a role in determining fuel prices. The price of petrol went up by 18 paise and diesel shot up by 33 paise read here: bit. A continued slump in the value of the rupee means fuel prices are likely to go up, making your commute and everyday activities expensive.

If you set a budget on how much you spend on fuel every month, you may have to readjust that now.