If you’re planning a vacation abroad this summer, the rising rupee will ensure you pay less. The 13 per cent appreciation of the rupee over the past 12 months has increased its buying power abroad.
But those dependent on remittances will feel the pinch.
While the dollar has fallen against the rupee, it has risen against the currencies of Hong Kong, Macau and Haiti, among others.
A trip to Fiji islands in the Pacific that would have cost you Rs 1 lakh last year will now be available for Rs 80,900, a saving of almost 20 per cent.
Similarly, if you’re planning to send your child to study in the US, you will save Rs 1.6 lakh on a $25,000 fee — against Rs 12.75 lakh you would have paid when the rupee was 51 to a doll-ar in 2008-09, you’ll shell out Rs 11.12 lakh (44.5 to a dollar) today.
Experts feel there is likeliho-od of further appreciation of the rupee due to strong inflows by foreign institutional investors (FIIs) into the stock markets. FIIs pumped in more than Rs 1,00,000 crore in the last financial year.
“This is good for overseas students and travellers,” said Surya Bhatia, a Delhi-based financial planner. “But it is not very exciting for people receiving money in the form of remittances.”
India tops the list of remittance receiving countries. It received $46.4 billion (Rs 2,08,800 crore) in 2008-09, of which $23.1 billion (Rs 1,03,500 crore) came as inward remittance for family maintenance.
A strengthening rupee, however, may not be healthy for a developing economy like India’s, experts say. “The composition of travel and studying abroad is very less when compared to remittances,” said Ashvin Parekh, national head-financial services, Ernst & Young.