Weakness in the rupee affects the economy from the common man. Know why it will affect you?
New Delhi: Asia’s only emerging currency is India’s quarterly weakness. Because in a report this week, economic growth is expected to reach a six-year low. The rupee has lost nearly 5 percent from its high of July this year and is under selling pressure due to rising levels of public debt and debt crisis in non-banking finance companies (NBFCs). If this happens, inflation can increase in the country. In such a situation, difficulties will increase for the common man.
Moody’s Investors Service has reduced the country’s credit rating outlook to negative this month. Moody’s cut the outlook by saying that the economic slowdown was deep and much longer than anticipated. According to the news published in NDTV, Indranil Pan, chief economist at IDFC First Bank Limited in Mumbai, said that the biggest emerging risk for India at the moment is weakness in growth. The rupee will probably weaken due to fiscal risks. Poor growth conditions may result in lower capital inflows and may be negative for the currency.
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India’s GDP growth forecast to be 4.2 percent – The country’s largest bank State Bank of India (SBI) has projected India’s GDP growth to be 4.2 percent in the second quarter. SBI has said that the country’s GDP growth will be seen due to decline in automobile sales, decrease in air traffic movement, decrease in core sector growth and decrease in investment in construction and infrastructure. Let us know that India’s GDP growth had already come down to a 6-year low of 5 percent in the June quarter. The rupee fell to 72.2425 per dollar this month, which is far from the nine-month low of 72.4075 in September.
What will be the effect on the common man?
>> Petrol and diesel will be expensive – India imports about 80 percent of its petroleum products. The import of petroleum products will become expensive due to the fall in the rupee. Oil companies can increase the domestic prices of petrol and diesel. Inflation will increase – Due to the increase in the price of diesel, freight will increase, due to which inflation may increase. Apart from this, India also imports edible oils and pulses on a large scale. The weakening of the rupee may increase the prices of edible oils and pulses in the domestic market.
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>> Studying and traveling abroad will become costly – Indian students studying abroad will have a significant impact on the weakness of the rupee. This will increase their expenditure. They will have to pay more for things. Apart from this, Indians going abroad will also have to spend more.
> They will benefit- On the other hand, weakness in rupee is good news for Indian IT companies. This will increase their earnings. Similarly, exporters will benefit, while importers will suffer.
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