Falling Rupee Adds to India’s Economic Woes
July 22,2013
India's currency - the rupee - has fallen to an all time low in recent weeks, putting pressure on nearly every facet of the once booming economy. The depreciation is affecting many who are already hurt by the country's high inflation rate.
New Delhi resident Jaskaran Lamba knew pursuing a Masters in Public Administration at Columbia University in New York would be expensive.
What he did not count on was a 13 percent drop in the rupee’s value in just two months to reach a record low of 60 against the U.S. dollar.
The additional financial burden has made him second guess whether starting the two year program in September will be worth it.
“The fact remains that I am going to pay $100,000 and if that $100,000 means a difference of five rupees, that’s straight five lakhs [500,000 rupees or $8,500]. Even if I take a loan or my parents are funding me, that’s a difference of five lakhs to them or to me from my savings,” Lamba stated.
He is not alone. Effects of the rupee’s depreciation will spread across much of the Indian economy, with most people eventually feeling the pinch.
Not only will imports, such as electronics and auto parts, be more expensive - but fuel costs will likely also go up. India is the world’s fourth largest importer of oil - relying on imports for 80 percent of its crude needs.
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