There is likely to be an indirect impact on loans. Not only imported items, components will also get expensive, which will shoot up the prices of goods like cars and appliances. Oil imports will get costly too, which can directly impact one’s expenses.
Increasing prices might also accelerate inflation.Īs rupee dips, importing items will get expensive, as importers need to buy in dollars to pay for the goods. The depreciating rupee is likely to have a direct impact also on spending as oil, imports, loans, etc. Further crude prices action along with FII's inflow outflows shall also give cues to rupee moves.” Dollar index staying above 105 also keeps added pressure on Rupee. Rupee weakness can continue till the time it trades below 79.25 in short term basis towards 80.50-80.75 zone. Jateen Trivedi, VP Research Analyst at LKP Securities said, “The lack of intervention from RBI could also weigh on sentiments on rupee weakness. It also reinforces the importance of USD as the safest currency during times of uncertainty,” Chanda said.Ĭhanda also added that now would be a good time for Indian investors to dollarise their investments, as the rupee is expected to decline further. Hence, investors are selling euros and buying dollars. “The impending threat of Russia cutting off gas supplies in winter coupled with the slow intervention by the ECB to control inflation, means that the recession in the EU looks imminent. On Monday, the Finance Ministry said at the Lok Sabha, “Global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian rupee against the US dollar,” further adding that global currencies such as the British pound, the Japanese yen and the Euro have weakened more than the Indian rupee indicating that the Indian rupee strengthened against these currencies in 2022.Īsheesh Chanda, founder & CEO of global wealth advisory platform Kristal.AI, said that it is a sign that global investors are choosing the safety of US markets over the recession risks of the EU.
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