Delhi/Mumbai: With the rupee breaching the 65 to a US dollar mark, analysts claim that the rupee could soon cross the 70-mark.
A falling rupee will pinch students like Arnav Mody who are pursuing courses in foreign universities. Arnav studying in New York University says the sliding rupee has put extra pressure on both him and his parents.
"I'll have to cut down on eating out, any shopping or other expenses not directly related to my education. I am also planning to take up a job on campus because then I'll be earning in dollars and it will help," he said.
For students like Arnav, the rupee now buys fewer US dollars than it did at the start of the year. It's the worst performing currency among emerging markets, falling 15 per cent in the last three months.
So what is the Indian government doing to stem the slide?
"Government does what it can and as the finance minister there is only so much you can do because at the end of the day it depends on the infrastructure in the country," said Jayant Manglik, President Religare Securities.
At the present rate of the Indian currency there is a fear that the government may not be able to control sharp rise in inflation and fuel prices, even forcing the RBI to give up on cutting interest rates.
On macro side, the sharp depreciation in the currency will lower growth expectations and impact foreign investments. Companies dependent on imported raw material will see a sharp fall in profits. Travelling and studying overseas too is bound to become dearer.
"Time for doing these adhoc one-off measures are off the table. They are not going to change people's minds. All those measures which have been taken on gold, curbing imports are all egregious, they are retrograde, they are pushing back the economy but they are having an effect on the current account," said Jahangir Aziz, Chief Economist, JP Morgan.