New Delhi: The rupee has never been in so bad shape as it is now. On August 28, the Indian currency slumped to a record low near 69 to the US dollar on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges. Although the intervention from the central bank seems to be giving the rupee a brief respite, a breach in the psychologically key 70 level could happen any time now. The rupee is emerging as a front-runner in a race to the bottom among the emerging market currencies. The rupee has fallen by around 20 per cent since the beginning of the year. The only currency that has done worse is the South African rand which has fallen nearly 23 per cent.A lot of volatility in rupee has been added by consistent selling by foreign investors. FIIs have sold almost $1 billion of Indian shares in a series of sessions despite the fact that Indian stocks have been a sturdy source of capital inflows in the first half of 2013. Experts say if more foreign investors throw in the towel, it will put the country in a vicious cycle which will badly hit the economy and investor sentiment. What India badly need at this time is foreign capital as it struggles with a record high current account deficit, growing fiscal pressures and an economy growing at the slowest in a decade.Despite the steep fall — the bottom of rupee is not yet in sight. Here are 10 worrisome points if you are wondering how the falling rupee will impact your overall budget.Electronic goodsGiven that electronic goods have very high import content, they will turn costlier. For instance, products like picture tubes, washing machines timers, are not manufactured in the country, while goods like microwave and ovens are imported as completely built units in India. They are likely to cost 4-7 per cent more. FMCG productsFast moving consumer goods , such as soaps, detergents, deodorants and shampoos, of which crude oil is an input, are likely to become more expensive. The rupee depreciation will add to the woes of companies like Hindustan Uniliver and Procter & Gamble. As a result they are likely to increase prices in the coming months.Foreign educationThe overall cost of a foreign education will increase considerably. For instance, those students who have a monthly budget of $1000 will now have to do with Rs 67,000 as against Rs 53,000 earlier. Students who have taken loans to fund their foreign degree, will also bear the brunt. Education loans are usually in rupees, but as students pay their expenses in a foreign currency, the cost of education and stay has increased. For $100,000, a student had to pay Rs 53 lakh. Now, he has to shell out Rs 67 lakh, depending upon the exchange rate. CarsThe fall in rupee will impact the automobile sector heavily. First, input cost will increase as a lot of companies use imported components. Second, some companies will have to pay higher royalty to foreign parent firms. Third, many have foreign currency loans in the form of external commercial borrowings and foreign currency convertible bonds. In turn the auto firms will hike prices in order to offset the increased burden. Maruti is expected to raise priced by 2% while companies like Hyundai, Honda and Ford that have large import content in their cars will have to soon increase prices to protect margins.Grocery billA weakening rupee has made crude oil, fertilisers, medicines and iron ore, which India imports in large quantities, costlier. These items will have an impact on your finances. Higher cost of imports will result in higher petrol and diesel prices.Jobs and salaryYour renumeration will shrink if you are in a industry that is dependent on imports. Every industry which is dependent on imports will have to face an increase in cost of production and operations. That means to bring down the costs, these companies will either hire lesser number of people of cut the salaries. Overseas vacationsYour foreign stay will be costlier by at least 3-5 per cent while shopping can become expensive by 5 per cent. Eating out will also be costlier by the same percentage. The impact of rupee depreciation will not become evident immediately as most people usually make travel plans well in advance. MedicinesA lot of companies import a huge amount of medicines and the ingredients used in them. A depreciating currency will make them costlier.FertilizersWe import a lot of fertilizers. So a falling rupee will make things difficult for our farmers.EntertainmentThe imported paperback and the latest laptop will also become more expensive. Electronic consumer goods such as computers, televisions, mobile phones, etc, with imported components will also become costlier.
