Rupee Inches Close To 80 A Dollar: Here's How It Will Impact Consumers

The consistent depreciation in the value of the Indian rupee against the dollar is a matter of concern for economy watchers. The rupee has fallen for four consecutive sessions, reaching a new record low of 79.90 while recovering by seven paise during the day on Thursday. However, a strong American currency overseas and forex outflows restricted the rupee's gain, dealers said.

On Thursday, news agency PTI reported the rupee plunged 9 paise to close at a new all-time low of 79.90 against the US dollar. That was just a whisker away from the next key psychological level of 80-to-a-dollar rate.

Bloomberg showed on Wednesday that the rupee was last changing hands at 79.8788 per dollar, edging closer to the 80 mark.

How will a depreciating rupee impact consumers?

The Indian currency has hit new lows over 27 times since February, when Russia invaded Ukraine, which includes six times the currency breached a new weak level this month, based on Nasdaq data.

India being an import-dependent economy could feel the heat of a falling rupee under inflationary pressures. It can affect the spending decisions of households that will have less money to spare.

The payments for the items which are imported have to be made in dollar terms, so a weaker rupee will drive up the prices of importing goods.

From electronics to packed food items (prepared with oil), consumers will have to shell out more. They will also have to pay more for foreign education and travel.

The education cost in the United States and travel there have gone up by seven per cent in the last six months, and with rupee weakening further, this will add to the pressure on consumers.

The collapse of the rupee started days after Russia invaded Ukraine when it hit 77 per dollar for the first time ever in March and has since hurled towards new lows breaching several key psychological threshold levels almost every other day.