How Does a Fall in the Dollar Affect Your Savings

The way different countries have currencies is the same as the way the currency in India is the rupee. The value of the currencies of different countries is compared with reference to the dollar.

You don’t think that if the rupee depreciates, what difference will it make to you? If you think so, then you are thinking wrong.

Actually, do you know that if there is a fluctuation of at least a few digits in the currency of India, then its effect affects our savings?

What is a Dollar

The dollar is the currency of the United States of America. This currency has been considered the strongest currency in the world. That’s why America comes in as a superpower.

What is the Dollar’s Relationship to the Rupee?

Let us tell you that at the international level, the prices of crude oil are determined in dollars. Now, for example, if crude oil is imported internationally, the oil company has to pay in dollars only.

Even if we export from outside, we first buy dollars by paying rupees and then import. That is, buy products from other countries.

How it Affects

If the rupee depreciates against the dollar, that is, if the value of the rupee decreases against the dollar, then we are spending the amount we were buying and importing in rupees.

Will read to spend more money than that. Example: If the value of the dollar increases from 70 rupees to 80 rupees, then we have to spend more rupees than before.

And our profit will remain the same. This will increase the trade deficit. If the trade deficit increases, Indian oil companies will make oil expensive.

This will affect transportation in such a way that the cost of transporting vegetables and other products from one state to another will increase.

This Will Affect Your Savings

Oil companies will have to bear more expenses due to the increase in cost and higher loading, i.e., transport costs. Due to which vegetables and products will become expensive.

This will spoil your budget. And you will have to withdraw money from your savings and buy more of the same item at a higher price.