Weak rupee hits overseas students, international travellers

Pune: Urmi Bhatia, a design student in New York, is considering taking up a part-time job with the rupee breaching the 87 mark against the US dollar in Feb.
"My living cost will go up now. Rents in the area where I stay are already high, and unless I take up a part-time job, it will be difficult to meet the extra expenses. Thankfully, a large portion of my university fees had already been paid in advance," said Bhatia.
Even international travellers are also finding themselves in a spot. "We booked our tickets for a visit to the US and Canada in advance because we planned to visit our son in March. Looking at the volatility of the rupee, we are worried that the cost of our trip will go up significantly," said Reema Shah, a Mumbai resident.
"The weak rupee will increase cost, but I don't foresee it to be much of a dampener for overall international travel. It may affect budget travellers, who may look at postponing trips or choosing domestic locations. However, most international trips are planned well in advance, so I feel that people will take some higher charges in their stride," said Sumitra Senapaty, founder of The WOW Club.
Macro-economic uncertainties after US President Donald Trump imposed trade tariffs on several key economies caused a further slump in the value of the rupee against the US dollar, impacting the budgets of overseas students and international travellers and causing a surge in the prices of imported goods. Given the continued macro weakness and FII outflows, market-watchers expect the rupee to remain volatile.
Jateen Trivedi, VP, research analyst, commodity and currency, LKP Securities, said, "The rupee hit a record low of 87.30 per US dollar recently. Looking ahead, the rupee is expected to remain volatile until there is clarity on the US tariff front. This year, the Union Budget was pro-middleclass, and the govt has tried to keep money in the hands of the common man and circulating within the economy. Investors should adopt a cautious strategy, considering the rupee's resistance at 85-86 and support in the range of 87.45-87.70."
For NRIs, a weaker rupee increases overall disposable income and has an immediate impact on purchases in India. "I was looking to buy a property in India for the last couple of months and had also identified it. I just made some advance payments last week as the currency rates were favourable for me," said Irfan K, a resident of Chicago.
Amit Agarwal, CEO and cofounder, NoBroker.com, said in the fiscal 2019-2020, NRIs were estimated to account for approximately 10% of the total investments in the Indian real estate market. However, in the ensuing years, this figure has seen an upward trajectory, and currently NRIs contribute around 17% to the Indian real estate sector. This demand is slated to reach 20% by the end of 2025.
"The falling rupee has a very positive impact in terms of purchases in real estate by NRIs in India. In the past, we have seen a correlation between both. We have observed in the past 20 years that although theoretically the rupee should depreciate every year based on interest rate differences between the US and India, this drop often happens in spurts. These spurts are very positive for NRIs buying property in India," he said.
Month 1 USD to INR
Feb, 2025: 87.10
Jan , 2025 86.53
Dec , 2024 85.55
Nov, 2024 84.55
Oct , 2024 84.06
Sep , 2024 83.75
Aug , 2024 83.86
Source: Investing.com