Effect Of Rupee Depreciation On Indian Economy

Lower value of Currency leads to rattle the economic growth of every small scale to large scale business affecting the population adversely. The terms Inflation, Price Hike, Imports, and taxes can’t remain untouched with the inclusion of Currency Depreciation for any country. Ultimately the financial deficit toils the commons facing misbalanced demand and supply chain if not tackled timely.

Understanding Currency Depreciation:

Lower exchange rate leads to decline in value of currency to its counterpart economies. Here in the pretext, INR to USD/Euro/Pound/Yen etc. The sudden fall in value of Indian Rupee has recently led to some tremendous changes which has alarmingly caused fiscal concerns amongst panel of financial advisors and the outcome of it due to its persistence.

Impact of Rupee Depreciation on Indian Economy.

Direct effect of Currency depreciation would be on (Non-Domestic Aspects):

• GDP
• Stock Exchange
• Oil Imports
• Vacation or Education (Abroad)
• Corporate Sector
• Consumer Market
• Import/Export Business
• Jewel Market

What is the Effect of Rupee Depreciation on Indian Economy (Domestic Aspects):

This would no doubt raise the concerns for common people. Following are some of the vital factors that tightens their grip over commoners.

• Price hike in imported items (Appliances/Fuel/LPG/etc. )
• Inflation.
• Education Fee
• Higher Interest Rate
• Plussed Taxes on Edibles
• Salary Cuts

Impact of Rupee Depreciation Against Dollar in India

With Indian Rupee marking Historic dip in value against USD (Rs. 73. 14/- equals 1 USD) the situation is somewhat distressing both in political as well financial terms. As said above the fluctuating nature of Rupee stands uncertain and raises more questions of currency outflows either thorough or citizens seeking foreign services (Education/Investment) or goods. With Interest and Inflation scaling up, the foreign investors are drawn towards a hampered economy easily.

Further Comments: Not all the factors lead to severity of Local economy, there are a few merits of undergoing the state of financial transitions. A country, as whole, maybe be treading on thin ice, but it allows citizens to focus inwards rather. With implicated fiscal scenario, people can invest in gold easily and can opt for domestic tourism. Micro-Business can inch towards further growth and can expect some vitality through such period. Drastic impact would arise if the depreciation remains constant for over a prolonged time length.