Re fall to inflate cost of essentials, says survey

The Indian rupee last week crossed its all-time low of 80 against the US dollar. This means that the dollar to rupee rate has moved from 1:38 in July 2007 to beyond 1:80 in July 2022 in relative economic terms.

Re fall to inflate cost of essentials, says survey
The central bank and the government has over the last few weeks taken steps to boost the foreign exchange reserves by taking steps to improve remittances to India.

Three in four Indians believe the fall of rupee from 38 to 80 against US dollar in last 15 years will impact them adversely, according to a survey by LocalCircles.

About 52% of the respondents expect impact due to higher transport and cooking fuel costs, cost of essential products and services while 52% expect goods and services to cost more, particularly healthcare and medicines. About 44% are concerned about higher overseas travel costs while 24% fear impact on overseas education plans for children/grandchildren. One in two Indians surveyed believe that in relative terms, Indian economy has performed poorly in the last 15 years.

The Indian rupee last week crossed its all-time low of 80 against the US dollar. This means that the dollar to rupee rate has moved from 1:38 in July 2007 to beyond 1:80 in July 2022 in relative economic terms.

The survey received over 34,000 responses from citizens in over 328 districts of the country of which 65% respondents were men while 35% were women; 43% respondents were from tier-1, 34% from tier-2 and 23% respondents were from tier-3, 4 cities and rural districts.

Experts point out that it is not only the Indian rupee which has been hit as the Dollar Index has gained 13% against six major currencies – euro, pound, yen, Swiss franc, Canadian dollar and Swedish krona – this year. Since the Russia-Ukraine war, the RBI has been closely monitoring the foreign exchange market. It has also been using its reserves as and when required.

The central bank and the government has over the last few weeks taken steps to boost the foreign exchange reserves by taking steps to improve remittances to India. The fifth round of the remittances survey by RBI for 2020-21 finds that the share of Gulf countries in total remittances has declined, reflecting slower pace of migration and presence of Indian Diaspora in informal sectors which was hit the most during the pandemic period.

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