The depreciation of the Indian rupee against the US dollar is expected to have an impact on the economy, which is causing concern among Indians.

The decline in the Indian rupee’s value against the US dollar over the past several years has triggered an alarm among traders and investors across the country. Last Monday, it observed its all-time low exchange rate of 80 against the US dollar. This indicates that the dollar to rupee rate has increased to 1:80 in July 2022.

In light of this significant currency depreciation, LocalCircles' most recent survey sought to understand public opinion on how they see India's relative economic success over the last 15 years. It also focused on seeing if citizens have concerns about the weakening rupee’s impact on their daily lives. The survey collected responses from 34,000 citizens from 328 districts of the country, where 65 per cent of respondents were men and 35 per cent were women. Furthermore, 43 per cent were from Tier 1, 34 per cent from Tier 2, and 23 per cent from Tier 3, 4, and rural districts.

According to the results, one in two Indians surveyed believes that India has performed poorly in terms of the relative economy, as there has been a huge depreciation from INR 38 per USD in 2007 to INR 80 per USD in 2002.

The Government’s Initiative to Slow Down the Rupee’s Decline

The Indian government and the Reserve Bank of India have taken new steps to boost foreign exchange reserves by adopting methods to improve remittances to India. The Remittances survey indicated that there was a decline in total remittances from the Gulf countries due to reduced migration and the presence of the Indian diaspora in informal sectors during the pandemic period.

In the face of ongoing rupee depreciation, the RBI has announced initiatives to decelerate the demand for foreign exchange by encouraging rupee settlement of trade flows (both exports and imports). It has been decided to implement an additional arrangement for invoicing, payment, and settlement of exports and imports in the rupee following prior clearance to increase the interest of the international trade community in the Indian rupee.

Indians concerned over the depreciation of the rupee

Although the RBI announced several initiatives, the majority of Indians believe that the fall of the Indian rupee against the US dollar will have a severe impact on their lives. Respondents of the survey expressed concerns that they and their families would be able to afford less in the coming five years as higher import costs would be reflected in the products they buy, including consumer goods and services, education abroad, and even petrol and diesel. This would have an impact on the growing number of students who want to pursue higher education.

Therefore, it is noted that the rupee depreciation is causing concerns in many sectors, anticipating a severe impact on imported goods and services in the coming years.