For the first time in 70 years, the Indian Rupee hit 70 against the US Dollar. It’s a free fall for the rupee as it breached the dreaded 70-mark against the US Dollar. Blame it all on the Turkish Lira which crashed by more than 8% against the US Dollar. Currencies of all emerging Economies were impacted by the crash of the Lira against the US Dollar.
The Rupee is at a record 70.32 against the US Dollar. Investors are dumping the rupee, the Turkish lira and all emerging market currencies. The Turkish currency has fallen by around 50% vs US Dollar in this Year. The Turkish President Recep Tayyip Erdogan blamed this crisis on US President Donald Trump, who had announced a doubling of tariffs on imports of Turkish Aluminium and Steel.
Yes, the Rupee is at 70. How does this affect you? Let’s find out. Want to know more on Investment Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
Turkish President Erdogan has adopted a one-man rule and made his son-in-law the Finance Minister. He has prevented the Central Bank from raising interest rates and has forced them to keep interest rates artificially low. This is affecting the economy and may bankrupt Turkish Companies and Banks who had availed foreign loans making foreign investors, very nervous.
The result is the Turkish Lira crashing against the US Dollar along with the Rupee and the currencies of emerging economies.
As the rupee crosses the 70-mark against the dollar, crude oil, fertilizers, medicines, iron ore and most of what India imports gets costly.
These are not your items of daily consumption, but you will surely feel the impact of the rise in import prices. India imports more than 80% of Crude Oil needs and the rupee crossing the 70-mark will only make Petrol and Diesel more costly. India’s Crude oil import bill could jump by $26 Billion in FY 2018-19.
India imports a lot of Crude Palm Oil. A rise in prices of imported crude palm oil increases prices of other edible oils. The retail price of edible oil goes up. Crude Oil is used as an input in soaps, detergents, shampoos and deodorants and all of them will become more expensive. India imports a lot of pulses and their prices are going to shoot up. Retail Inflation would soon rise making well, everything expensive.
Planning to go on an overseas holiday? Well, better postpone that trip. If you buy dollars at Rs 70, that overseas trip is going to be really costly.
As the Rupee has hit the 70-mark against the Dollar, its bad news for Oil Marketing Companies (OMCs) like HPCL, BPCL and IOC which depend heavily on Crude Oil imports. The prices of consumer goods (Goods used by consumers rather than the manufacturing industry), could see a rise in prices as imports get costly.
If you or any family member is going abroad for medical treatment, there’s bad news. Medical treatment abroad is going to be really expensive as you spend in Dollars. You are going to lose a lot of money if you don’t have insurance to cover medical treatment abroad.
IT and Pharma Companies and also exporters who earn in dollars stand to gain from the Rupee crossing the 70-mark. If you are an overseas worker earning in US Dollars you should cash in on your gains.
If you are an NRI who has invested in India, this is your time. You will make a lot of money as the rupee depreciates against the Dollar and you enjoy the incremental exchange rate when you withdraw the money.
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