{"id":8321,"date":"2022-05-12T11:22:38","date_gmt":"2022-05-12T05:52:38","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=8321"},"modified":"2022-05-16T11:03:12","modified_gmt":"2022-05-16T05:33:12","slug":"indian-rupee-hits-an-all-time-low","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/","title":{"rendered":"Indian Rupee Hits an All-Time Low!"},"content":{"rendered":"\n<p>On Monday, 9 May 2022, the Indian Rupee hit an all-time low of 77.47 against the US Dollar, bringing further bad news for the economy that is already reeling under high <a href=\"https:\/\/www.tickertape.in\/blog\/in-2022-stick-to-companies-with-pricing-power\/?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\">inflation<\/a>!\u00a0<\/p>\n\n\n\n<p>But this is not a sudden occurrence. The Rupee has been on a depreciating trend since the beginning of 2022. A combination of factors has just fueled the fire far more, including the <a href=\"https:\/\/www.tickertape.in\/blog\/ukraine-crisis-indian-stock-market-to-pay-the-price\/?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\">Russia-Ukraine war<\/a>, global uncertainty, China&#8217;s vulnerability, rising inflation, and aggressive rate hikes by central banks across the globe.<\/p>\n\n\n\n<p>But what is causing this, and how does it affect you? Let&#8217;s understand.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#Cause-and-effect\" title=\"Cause and effect\">Cause and effect<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#Impact-on-the-Indian-stock-market\" title=\"Impact on the Indian stock market&nbsp;\">Impact on the Indian stock market&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#Impact-on-imports\" title=\"Impact on imports\">Impact on imports<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#Impact-on-loans\" title=\"Impact on loans\">Impact on loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#Impact-on-foreign-education\" title=\"Impact on foreign education&nbsp;\">Impact on foreign education&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#Impact-on-foreign-travel\" title=\"Impact on foreign travel\">Impact on foreign travel<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#Impact-on-remittances\" title=\"Impact on remittances\">Impact on remittances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/indian-rupee-hits-an-all-time-low\/#What-is-the-way-ahead\" title=\"What is the way ahead?\">What is the way ahead?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Cause-and-effect\"><\/span><strong>Cause and effect<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The direct effect can be seen in the United States, where the Federal Reserve raised interest rates by 0.5%. Hiking interest rates is one of the strategies to combat inflation.<\/p>\n\n\n\n<p>However, this has resulted in higher borrowing costs, i.e. higher interest rates on loans, limiting business growth. This forces foreign investors to offload their risky assets from the country, and the demand for the Rupee weakens.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-on-the-Indian-stock-market\"><\/span><strong>Impact on the Indian stock market&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Currently, funds totalling $17.7 bn have been withdrawn from the Indian <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-shares\/\">stock market<\/a> by <a href=\"https:\/\/www.tickertape.in\/blog\/how-do-fdi-fpi-and-fii-differ-from-each-other\/?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\">foreign investors<\/a>. This means that <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> markets could fall sharply, resulting in a drop in stock and <a href=\"https:\/\/www.tickertape.in\/blog\/equity-mutual-funds\/\">equity mutual fund<\/a> investments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-on-imports\"><\/span><strong>Impact on imports<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>With the dip in the Rupee value, importing items is likely to get more expensive as merchants need to buy Dollars to pay. <a href=\"https:\/\/www.tickertape.in\/blog\/oil-production-cut-triggers-and-consequences\/?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\">Oil<\/a> is one such <a href=\"https:\/\/www.tickertape.in\/blog\/commodity-in-economy\/\">commodity<\/a> that will get costlier, directly impacting you. Furthermore, other imported items and components, such as cars and appliances, are likely to become more expensive, resulting in rising prices. This increase in prices could exacerbate the already-high inflation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-on-loans\"><\/span><strong>Impact on loans<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As the Rupee falls in value, import prices rise, making goods and commodities more expensive. Therefore, if you wish to fund a purchase via a loan, you would have to apply for a higher amount. To add to this, banks have raised interest rates on loans after the RBI increased the repo rate to 4.40% recently. This makes EMIs more expensive.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-on-foreign-education\"><\/span><strong>Impact on foreign education&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Foreign education will become more expensive as the Rupee loses value against the US dollar. Because of the rupee depreciation, one will have to shell out more rupees for every dollar. As a result, <a href=\"https:\/\/www.tickertape.in\/blog\/international-students-day-2021-investing-lessons-to-learn-from-students\/\">students<\/a> studying abroad or planning to relocate overseas will need to increase their budgets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-on-foreign-travel\"><\/span><strong>Impact on foreign travel<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>With the new Rupee rate, $1 equals Rs 77.47. Consumers expecting or planning to take a vacation abroad will have to spend more money on conveyance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-on-remittances\"><\/span><strong>Impact on remittances<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>On the happier side, non-resident Indians (NRIs) who send money back home, will be able to send more in Rupee value.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-is-the-way-ahead\"><\/span><strong>What is the way ahead?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is critical to consider how the ongoing <a href=\"https:\/\/www.tickertape.in\/blog\/strategies-to-tackle-volatility\/\">market volatility<\/a> affects the nation as a whole; it is now up to the RBI to decide how to navigate further. One way can be that the central bank releases Dollars to control the rising <a href=\"https:\/\/www.tickertape.in\/blog\/volatility\/\">volatility<\/a>. However, for the first time in a year, the forex pile has fallen below $600 bn, depleting $36 bn in 2022 so far, which remains a source of concern for the RBI.<\/p>\n\n\n\n<p>While we hope you enjoyed reading this one, you can also track how the market reacts to the rising volatility by eyeing the <a href=\"https:\/\/www.tickertape.in\/market-mood-index?ref=homepage_product-shortcut&amp;utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\" target=\"_blank\" rel=\"noreferrer noopener\">Market Mood Index (MMI) here<\/a>. This <a href=\"https:\/\/www.tickertape.in\/blog\/how-mmi-can-help-in-timing-your-investments-better\/?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\">MMI tool <\/a>can help you track the <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-market-sentiment-and-how-to-analyse-it\/\">market sentiment<\/a> and investors&#8217; attitudes towards the overall stock market or a specific stock!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Read how the Indian Rupee hitting a historic low can affect your stock market investments, purchases, loans, foreign travel, overseas education, and more.<\/p>\n","protected":false},"author":93,"featured_media":8323,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[10,1744],"tags":[1598,858,1597,57],"acf":[],"modified_by":"Neera Bhardwaj","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/05\/TT-11-May-Rupee-Falling-BB.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/8321"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/93"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=8321"}],"version-history":[{"count":5,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/8321\/revisions"}],"predecessor-version":[{"id":8351,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/8321\/revisions\/8351"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/8323"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=8321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=8321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=8321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}