On Thursday, the rupee fell to a new low of 59.98 a dollar. This is bound to have serious repercussions on the economy. The prices of petroleum products are likely to reach an all-time high. Stocks and bonds are tumbling. To arrest this downfall, the RBI is likely to sell dollars.
The government should have taken short-term measures to stabilise the rupee when it was vulnerable.
Vijay D. Patil,
The rupee fall will lead to foreign investors pulling out of Indian equity markets. Students studying abroad will have to cough up more. The current account deficit and the difference between inflows and outflows will widen further. Travel will become more expensive for overseas travellers. Goods with imported components will become costlier and the medicare abroad will become expensive. Last but not the least, the oil import bill spurt will lead to higher petrol and diesel prices, which will have a cascading effect on inflation as well.