Indian Rupee on Thursday touched all-tim elow against US dollar. The rupee plunged at 68.89 per dollar, after it closed at 68.61 on Wednesday.
The nosedive came while maintaining a 19-month low, owing to the increase in the international crude oil prices and trade war concern between the United States and China.
The OPEC announcement made last week, reported fall in crude prices, that have been finding support on lower levels and subsequently keeping currency under pressure. Meanwhile, Sensex fell over 90 points in early trade today after the rupee sank to a lifetime low of 69.10 against the US dollar amid firming crude oil prices.
There was also caution among investors on the expiry day of the June series derivatives contracts, brokers said.
Below we have listed few points that how the weak rupee will affect you
Continuous downfall in Indian rupee is worrisome for imported goods as the cost of imports will go up. Currently, India imports around 80 per cent of its crude requirement. The rupee downfall will expand India's import bill and will eventually be contributing to the inflation.
In a scenario, where inflation further goes up then there are chances that RBI may hike rates resulting your EMIs outflow.
The current low is also a bad news for students aspiring to study abroad, as lower rupee value will lead to higher education costs. Travelling to out of India will also become expensive.
However, if you have assets on foreign land, then there's some silver lining as a weak rupee will increase the value of your investment.
What causes the low value?
Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices kept the rupee under pressure.
Global oil prices have climbed after the US asked its allies to end all imports of Iranian oil by November. Concerns over supply disruptions in Libya and Canada also pushed prices higher.
Higher crude oil prices and a declining rupee are a double whammy for India, forex dealers said. At the interbank foreign exchange market, the rupee opened at 68.87 a dollar against 68.61 previously and sank to 69.10 in morning deals, falling 49 paise.
(With inputs from agencies)
