Last week, the rupee plunged to 72 against the dollar over tumbling equities with incessant foreign fund outflows also weighing in on the sentiment. The sudden drop in Chinese Yuan also increased the volatility in emerging-market currencies, said Abans Group in a note. “The rupee has become Asia’s worst-performing currency in August amidst pressure from Yuan, the Us-china trade war and a massive withdrawal of funds by FPIs (foreign portfolio investments) after a change in their tax structure," it noted. However, India was not the isolated case; most leading currencies witnessed depreciation.
IMPACT ON TRAVEL COST
The depreciating rupee can affect your international travel plans, as your cost may go up by 3-10%. The main impact is on your forex and the expenses you incur during the trip. Also it depends on the destination of your travel. Say you are travelling to a country where the currency is stronger, such as the US, you will find less value for your money. However, if you are travelling to emerging countries where their currencies have depreciated, then you will not see a huge difference. There could be a possibility that in some countries such as Turkey you may find more value for your currency.
WHAT YOU SHOULD DO?
Book your trip at least three months before you plan to travel. If you are willing to explore, you can look for destinations which will give you more value for money. To get the best flight deals, book on Wednesday mornings. If the depreciating currency is impacting the cost of your trip, you can reduce the duration. Buy your forex from a place where you have to pay no margin cost, as the extra fee will eat into your savings. Also, avoid double conversion by changing rupee to dollar to the currency of the destination you visit. Purchase forex cards online as the fee will be lower.