Now, your American degree may cost less!

By Kapildeo Singh

Your favourite imported chocolates may cost less, too. This is due to the slow but steady rise of the rupee against the US dollar.

As on September 21, 2007 the buying rate is around Rs 39 per US dollar.

So, how does this impact you?

Should you worry or rejoice?

The good news

"If you plan to travel or study abroad, it will cost you less, " says certified financial planner Gaurav Mashruwala.

For instance, when your cousin studied in the US last year, his total expenses might have been USD 20,000. If the dollar was priced at Rs 45, this translates to Rs 9 lakh.

If you attend the same course today, and it costs USD 20,000 -- due to the new exchange rate, you will pay (at Rs 39 per dollar), Rs 7,80,000, saving a cool Rs 1,20,000! 

But not all of us are going abroad. So, who else will be impacted by the rising rupee?

“The cost of imported goods where payments are made in dollars, will decrease. This could include imported FMCG products and perishables at malls and other stores, ” says financial expert Sandeep Shanbhag. 

For example, a bar of Hershey's chocolate, which costs Rs 80 at the foreign exchange rate of Rs 40 per dollar will now cost Rs 78, cheaper by Rs 2. 

However, all your favourite imported goods will not become cheaper. This is because not all items are imported using the US dollar. For instance, the UK Pound and the Euro, have not declined against the rupee.

The bad news

"If you are getting any money from abroad in terms of remittances etc, then the value will be lesser than what it was with a costlier dollar," says Mashruwala.

For instance, you may have received USD 2,000 every month from your brother or son, two years ago, at the foreign exchange rate of Rs 45 per dollar. Hence it was worth Rs 90,000, then. Today, the same amount is worth Rs 78,000. That is lesser by Rs 12,000 for you.