The effect of depreciating rupee has already shown up in every sphere of daily life. The airlines are also all set to touch sky high airfares in a few days in the peak travel period.
Jet Airways followed its smaller rival SpiceJet and hiked fares by a steep 25 per cent to mitigate the impact of the sharp fall in the rupee value and a near 15 per cent spike in oil prices of late.
The main causes of rise in airfares is that oil companies have hiked aviation turbine fuel (ATF) prices by 7%, taking the prices of jet fuel — which is the single largest component of an airline’s operating cost — to an all-time high. Now ATF per kilo-litre costs Rs 75,031 in Delhi; Rs 77,632.4 in Mumbai and is the steepest in Kolkata at Rs 85,645.1. The move comes in the wake of a nearly 25 per cent fall in the rupee against the dollar and a recent 6.9 per cent hike in aviation turbine fuel. International oil prices have been trading between USD 105 and USD 115 a barrel since the past few months and following the Syrian crisis, has seen more upward spurt.
The depreciating rupee is revealing its colours one by one and the entire economy is facing its consequences.
But the situation with respect to the depreciating seems to be improving after the installation of Mr. Raghuram Rajan as the Governor of RBI on 4th September 2013. The Indian currency and stocks have jumped in a day after he took charge and promised tough action to boost growth. The Indian rupee, one of the world’s worst performers this year, rose 2.3% against the US dollar.
So, the citizens of India, let’s join our hands and fight with the depreciating rupee. Rupee is depreciating due to excessive demand for foreign currency which indirectly arises because of rise in demand for imported products. The major imported product is crude oil, which is a necessity and the demand for which cannot be reduced to great extent. But the demand for imported cars, cosmetics , phones which are instruments of everyday life can definitely be reduced by substituting them with the consumption of the commodities of Indian brand and make.
“Every drop of water, makes the ocean stronger”, similarly, our efforts in reducing the consumption of imported products will have a huge effect in preventing the rupee from depreciating on a macroeconomic scale.
Go Indians, do your bit!