With the rupee tumbling to an all-time low, touching `57.93 against US Dollar on Monday, many sectors depending on foreign exchange have been a concerned lot. While experts are suggesting considerable appreciation in the cost of travel abroad and education in foreign universities, commerce and industry are likely to be the worst affected. The earlier recorded low was `57.32 per dollar in June last.
Though the plummeting value of rupee is bad news to many, there are also some who are celebrating. While those in need of buying dollars are unhappy, some of those earning in dollars even hope that the rupee devalues further to `60 per dollar. “For individuals like me who work for clients abroad, it is a very good situation,” says R Navya Kavya, a freelance graphic designer in the city. “I hope it touches `60 soon,” she says.
Popular perception is that Export Oriented Units (EOUs) are going to have a profitable time, earning higher returns for each dollar received. However, according to Devendra Surana, president of the Federation of Andhra Pradesh Chambers of Commerce and Industry (Fapcci), the present scenario is very bad. To some extent EOUs will benefit, but the fact is most of EOUs have loans to repay, he said. “We were expecting no further depreciation, but now it looks like the Reserve Bank of India’s (RBI) intervention is the only way to prevent rupee from falling further,” he told Express.
On the other hand, Sai Prasanth, a tax consultant, says all is not that bad. “While EOUs can enjoy a short-term gain, it is also a very profitable period for those in the forex trade. It is the best time for domestic companies to enter into contracts with foreign corporates,” he adds.
The fall of India rupee is going to have a negative impact on those travelling abroad. Vijay Mohan Raj of Sameera Travels says that corporates in the city have already started reviewing their outbound travels. “Individuals may not cancel, but might postpone their trips abroad. But I think the corporates have already started reviewing the foreign trips of their employees,” he said. An average IT company in the city, according to him, sends anywhere around 700-800 employees abroad every year.
“Travel abroad has become very expensive compared to a weeks before. Air tickets too will become more expensive,” says Raj. However, he feels it is a favourable situation for Indian hoteliers and vendors as more inbound travel can be expected. “Indian vendors will have an advantage as it is a favourable situation for tourists coming to India,” he adds.
Experts in the education sector too point at increased expenditure on study abroad. “In terms of people leaving for foreign countries from the state, it has been a constant in the last couple of years. Now, studying abroad is going to be a little more expensive with the fees for the current semester rising by 5-10 percent,” said Krishnam D Raju of Eduquote educational consultancy. “The impact of falling rupee could be seen next semester,” he said.