New 500 Rupees Note

What does the Rupee falling mean for the common man in India?

The rupee falling in India can seriously impact the economy and the common person. It is a calling for several financial disturbances for the country as well as the common person.

The following are the major problem that a common person faces when the India Rupee falls in the market.

• Rising Inflation.

Inflation is one of the direct impacts of the falling value of the Rupee. Inflation refers to the hike in the prices of goods. From crude oil to edible oil, all the prices are hiked.

India is a developing nation, which has only a 5% population belonging to the High-Class Society. The remaining 95% of the population range in the zone of lower-class and middle-class.

A simple term like Inflation can have a challenging and serious impact on 95% of the population of India. Due to the falling of the Rupee, each individual’s expenses rise, causing a financial crisis in every Indian household.

• Hike in the rates of Commodities.
India is an agricultural country. It is widely dependent on fertilizer imports. Due to the fall in the value of the Rupee, the fertilizer subsidy is set to hike.

There will be a significant hike in the gems and jewelry, petroleum products, organic chemicals and automobiles, and machinery items as they are India’s key export items.

The hike in the commodities is the result of an increase in logistics rates due to lower export and high import.

• Expensive loans.

With the surge in the Repo rate by the RBI due to the falling rupee. The banks will take money from RBI at a higher interest rate. Similarly, the banks will also provide loans to common people at higher interest rates.

Hence, with the falling value of the Rupee, there is an immediate surge in the interest rates for loans, and it ends up being a burden for the common person in India.

• High Rates for Foreign Travel and Education.

It is an inevitable effect of the falling value of the rupee. When there is a decrease in the value of the Indian Rupee, there is an automatic surge in the value of dollars or any other foreign currency.

People who want to go to foreign for travel or education have to pay more money for the same amount of money in foreign currency. It is a burn in the pockets of an Indian common man.

• Impact on Foreign Investors Portfolio.
When there is a fall in the value of an Indian Rupee, there are constant fluctuations in the stock market.

The fluctuations in the stock market result in the constant buying and selling of Indian stocks by Foreign Investors, which impacts their portfolio.

Foreign Investors start pulling out of equity markets, resulting in a big fall. It results in a decline in the valuation of companies’ stocks and other equity-related investments like mutual funds.

A common man in India is the ultimate victim of any political, climatic, or economic change in the country.

The irony of India is that 95% of the population in the country faces the wrath of all the changes happening at the domestic level.

Tags :

Leave Your Comment