Since the end of 2017, the Indian rupee has fallen to close to 14% to touch the value of the US Dollar at close to 73. There are concerns among our Loan applicants that if the rupee continues to fall, will that affect our personal loan eligibility criteria in anyway? The answer to this is NO!
You can still easily apply for a personal finance loan by going to Loan Singh’s website.

The Rupee Problem

The depreciation of the rupee is expected to impact different sectors of India. This is sure to hurt the economy in the long run. India’s current account deficit is expected to reach close to 2.5% of the GDP by 2019. The recent India-wide bandh was organized to protest the rise in oil prices. The government’s response to this could feature certain deposit schemes for NRIs (non-resident Indians).

A number of countries are facing a similar situation where their currency is taking a slide compared to the US Dollar. Some parameters to a slide in currency in any country can be attributed to market volatility, inconsistent corporate earnings and a slow economic growth. Also, for India, their cross-border payments tend to be dollar oriented. With a fall in the Indian rupee, the cost of import rises. India is an import-dependent country and hence, the fall in rupee can have its repercussions on a number of other parameters. One such parameter is Inflation.

Impact of the Rupee Fall

The rupee problem will no doubt lead to an increase in the cost of a number of goods and services. Just look around you. Raw material, machinery, daily food items, chocolates, finished goods, petrol and diesel are just some of the products whose rise in cost has gotten us alarmed. The burden is sure to befall the poor customer. If the rupee falls by say 10% then, the cost of imported items rises by 10% as well.

All consumer durable products with an ‘import’ tag attached to it are set to become expensive. Traveling and staying abroad will become expensive as hotel bookings and flight tickets are dollar dominated. Likewise, tourists visiting India over a vacation will find it cheaper.

Imported liquor prices however will remain unaffected in the short term. Liquor brand prices are registered with the state excise department. This is locked in for the complete financial year. If the Indian rupee continues to fall, then popular liquor brands will have to check for price correction. In territories of Maharashtra however, wholesale trade of liquor is not regulated by the state departments.

Patients suffering from ailments that require treatment dependent on imported pieces of equipment, will have to pay more. For example, a patient suffering from Wilson’s disease (a condition where copper is not eliminated completely from the body), will require the drug trientine dihydrochloride to remove copper from the body. A month’s dosage can cost a patient Rs.1,50,000 and upwards each month. Even immunotherapy drugs for patients suffering from cancer could cost up to Rs. 2,50,000 per month. Prices for stents that are imported is also set to go high. India imports close to 80% of its required medical equipment.

Probable Solutions

One probable solution to meet the fall in Indian rupee is currency devaluation. With import becoming expensive, export becomes cheaper and therefore an increase in domestic demand can usher in creation of jobs in the export sector.

There won’t be a huge improvement in the current account deficit, but those associated to the export sector should get the currency re-strategized. A falling rupee can in some way help the smaller players who are fighting hard with limited resources.

Within the FMCG sector, a depreciating rupee can lead to cost cutting. Revising prices is a difficult call-to-action but nobody said it would be an easy task. It isn’t a good time for investors to invest at this moment. A short time period investment solution is perfect for now. Household budget is also set to face a crisis to some extent. The festive season of Diwali and Dhanteras will be interesting, with jewelry and other items set to face a testing time.

About Loan Singh

Loan Singh is a digital lending platform that prides in providing online personal loan or unsecured personal loan to salaried individuals. You can apply for quick funds as an easy emergency loan which is not a bank loan. We provide a loan with the best personal loan interest rates. The instant funds, or instant loans, are loans between Rs.50,000 and Rs.5,00,000 taken for purposes such as:

• Home improvement loan/Home renovation loan
• Marriage loan/ Wedding loan
• Medical loan
• Used vehicle loan
• Consumer durable loan
• Vacation loan
• Debt consolidation loan
• Credit card refinancing loan
• Job relocation loan
• Travel loan
• Festival loan
• Gold jewelry loan
• Shopping loan
• Lifestyle loan

You can calculate your easy EMIs using our personal loan EMI calculator. We accept bank statement, PAN, and Aadhaar for quick loan approval. A bad credit score or credit report errors can lead to personal loan rejection. The ‘Loan Singh Finance Blog’ is one of the best finance blogs in India. Loan Singh is a product of Seynse Technologies Pvt Ltd and is a partner to the Airtel Online Store.

Loan Singh’s Online Presence

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