You've Been Logged Out
For security reasons, we have logged you out of HDFC Bank NetBanking. We do this when you refresh/move back on the browser on any NetBanking page.
OK- Home
- PAY Cards, Bill Pay
- Money Transfer
- To Other Account
- To Own Account
- UPI (Instant Mobile Money Transfer)
- IMPS (Immediate Payment 24 * 7)
- RTGS (Available 24 * 7)
- NEFT (Available 24 * 7)
- RemitNow Foreign Outward Remittance
- RemitNow2India (Foreign Inward Remittance)
- Remittance (International Money Transfers )
- Religious Offering's & Donation
- Forex Services for students
- Pay your overseas education fees with Flywire
- ESOP Remittances
- Visa CardPay
- Cards
- Bill Payments
- Recharge
- Payment Solutions
- Money Transfer
- SAVE Accounts, Deposits
- INVEST Bonds, Mutual Funds
- BORROW Loans, EMI
- INSURE Cover, Protect
- OFFERS Offers, Discounts
- My Mailbox
- My Profile
- Home
- PAY Cards, Bill Pay
- Money Transfer
- To Other Account
- To Own Account
- UPI (Instant Mobile Money Transfer)
- IMPS (Immediate Payment 24 * 7)
- RTGS (Available 24 * 7)
- NEFT (Available 24 * 7)
- RemitNow Foreign Outward Remittance
- RemitNow2India (Foreign Inward Remittance)
- Remittance (International Money Transfers )
- Religious Offering's & Donation
- Forex Services for students
- Pay your overseas education fees with Flywire
- ESOP Remittances
- Visa CardPay
- Cards
- Bill Payments
- Recharge
- Payment Solutions
- Money Transfer
- SAVE Accounts, Deposits
- INVEST Bonds, Mutual Funds
- BORROW Loans, EMI
- INSURE Cover, Protect
- OFFERS Offers, Discounts
- My Mailbox
- My Profile
- Home
- PAY Cards, Bill Pay
- Money Transfer
- To Other Account
- To Own Account
- UPI (Instant Mobile Money Transfer)
- IMPS (Immediate Payment 24 * 7)
- RTGS (Available 24 * 7)
- NEFT (Available 24 * 7)
- RemitNow Foreign Outward Remittance
- RemitNow2India (Foreign Inward Remittance)
- Remittance (International Money Transfers )
- Religious Offering's & Donation
- Forex Services for students
- Pay your overseas education fees with Flywire
- ESOP Remittances
- Visa CardPay
- SAVE Accounts, Deposits
- INVEST Bonds, Mutual Funds
- BORROW Loans, EMI
- INSURE Cover, Protect
- OFFERS Offers, Discounts
- My Mailbox
- My Profile
- Personal
- Resources
- Learning Centre
- Dollar rising How a falling rupee impacts the average Indian
Dollar rising: How a falling rupee impacts the average Indian
The Indian rupee has fallen to an all-time low against the US dollar as fears of a global recession caused investors to seek refuge in the greenback.
In late September, the rupee stood around 81.6 against the dollar. And with the Federal Reserve, the US central bank, expected to continue fighting back inflation with aggressive rate hikes, analysts expect the Indian rupee to remain weak in the near to mid-term.
So how does a falling rupee impact you and your investments? To understand this, we must first understand what happens when the rupee depreciates.
When the rupee falls, it becomes weaker compared to the dollar, meaning you need more rupees to buy a single dollar than you did before. For instance, a year ago, it required ₹74 to purchase $1, compared to ₹81 now. This depreciation means imported products will become costlier. So, an importer that brings in an item costing $100, will now have to shell out ₹8,100 compared to ₹7,400 a year ago.
On a macro scale, the impact of rupee fall tends to be directly on inflation (as described in the example above). But it also has an indirect impact: for instance, costlier crude oil, the raw material to create petrol and diesel, will increase transportation costs, which will impact prices of other goods.
Besides, the effect of rupee fall can also be seen on various classes of people and businesses in specific ways. Below are some.
Impact on expenses: Higher inflation ultimately means your household budget gets tighter. Plus, you pay more for everything, from groceries and clothing to transport. Even electronics such as phones and laptops will become costlier since most of the components for these devices are imported.
If you are planning to study overseas or are planning a foreign trip, a fall in the rupee also means you need a bigger budget as you'll have to pay more rupees for the same goods and services abroad.
Impact on business: A positive impact of currency devaluation is that exports become cheap. This is because export companies receive payments in dollars, which they exchange for more rupees. Hence, export-oriented sectors such as pharma, IT, auto, gems and jewellery will benefit from the depreciating rupee. On the other side, importers, as discussed above, will feel the heat from a falling rupee.
Impact on investment: A fall in the rupee essentially means investors are selling rupee-based investments to buy dollar-based ones. This means the domestic stock market is likely to take a hit. However, if you have exposure in US equities, they may appreciate as the dollar strengthens.
How to safeguard personal wealth and investments against the falling rupee
- Don’t panic. Step one is to realise that the economy, including interest rates, inflation and currency rates, move in cycles. The rupee has remained resilient for a long time and even now, has outperformed most of its peers. Without taking kneejerk decisions, go through the below pointers and make certain changes to your lifestyle and investments.
- Evaluate your budget. Cut down on discretionary (or optional) spending spends where you can. Even when it comes to non-discretionary (or necessary) spends, look at items where prices have been rising sharply and try and substitute them with others.
- Avoid the cash trap. Inflation erodes the value of cash. So instead of keeping large amount of cash, try and make investments that could protect against rising prices on the below lines.
- Rebalance your portfolio to give more weightage to large-cap stocks as they are considered safer. Invest in companies with powerful brands that have pricing power. Avoid import-oriented companies and go for those having large exports such as IT and pharma companies. Consider investing in global funds, especially those denominated in the US dollar. You can also look at taking some exposure to gold, which is considered as a haven against inflation. Read more on how inflation can affect you, by clicking here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.