For the first time since May 13, 1998, the value of one dollar has gone at less than Rs 40. The value of rupee had touched an all-time low of 49.06 against the dollar in May 2002 within five-and-half years; the rupee has gone strong against the dollar. On Thursday, the rupee appreciated to the highest level against US dollar in last ten years.
When the foreign exchange markets closed the daily business on Thursday eveing, the dollar touched all time low in the last decade at Rs 39.89. It left the importers celebrating the growing strength of rupee’s value against dollar. At the same time, it left exporters worried about the shrinking margins. People started cheering or jeering that depended on their situation.
The strong rupee against dollar is good for the people planning to travel abroad because they will have to pay less to get the same number of dollars. This is also a good news for the consumers of imported goods and for students who want to go abroad for studies.
At the same time, this is not good news for NRIs planning to visit India and the families who are sent money by relatives from abroad. The same number of dollars would fetch them less Indian rupees.
On the contrary, if the same story of rupee continues against dollar, it would drive the Foreign Institutional Investors (FIIs) to invest more in India because their dollar returns would keep increasing with stable rupee returns. The oil companies and the importers of gold also will be happy that domestic prices are holding relatively stable.
On the other hand, the software export companies would face reduction in already thinning margins. Textiles, garments and leather exporters are other major losers as global competition prevents them from increasing their dollar prices too much.