Rupee's Slide To Record Low Makes Studying Abroad Costlier, What's The Solution?

The rupee is currently trading at its all-time low of 83.10 against the US dollar, due to a negative trend in domestic equities and foreign fund outflows. The rupee is also likely to trade with a negative bias on risk aversion in global markets and a rising US dollar. The all-time low rupee will make imports costlier as well as raise the costs to study abroad. An expert said that students need to explore diverse funding options and robust financial strategies to navigate the currency fluctuation challenges.

On Friday, at the interbank foreign exchange, the domestic unit opened at 83.03 against the dollar and moved in a range of 83.02 to 83.13 in the day trade. It finally ended the day at 83.10, registering a fall of 1 paisa from its previous close. On Thursday, the rupee had also settled lower by 1 paisa at a record low of 83.09 against the US dollar.

Amit Singh, founder of UniCreds, an extended arm of UniScholars, “The recent depreciation of the Indian rupee against the US dollar brings forth financial considerations for students aspiring to study abroad. Tuition fees and living expenses are significant commitments. The rupee’s value decline translates to higher expenses in dollar terms.”

He, however, added that students can proactively explore diverse funding options and robust financial strategies. “By doing so, they can navigate this challenge with resilience, ensuring their academic journey remains as enriching and transformative as ever.”

Talking about the financial strategies, for Indian students currently studying abroad, this situation offers a favourable chance to enhance their income through employment. Those earning in dollars can effectively handle expenses and loan repayments by investing diversely in either dollars or rupees, depending on their preference.

“Scholarships can also ease financial burdens. Additionally, the rise of specialised non-banking financial companies offering international education loans can assist students in pursuing their studies strategically without financial worries. This evolving scenario highlights challenges and opportunities, ultimately shaping the financial landscape of international education for Indian students,” Singh said.

In the near term, RBI may try to protect the level of 83.30 but the direction remains upwards for USDINR as long as it holds 82.70, Parmar said. “Rupee in the last couple of sessions has been consolidating in a narrow range, following suspected RBI intervention and dollar inflows that curtailed sharp depreciation of the currency,” Gaurang Somaiya of Motilal Oswal Financial Services said.

Anil Kumar Bhansali, head of (treasury) and executive director of Finrex Treasury Advisors LLP, said, “The main reason for the falling rupee has been the interest differential between Yuan and the dollar falling, as China cuts interest rates while the US increases it. This has kept the Yuan weak, thus affecting the other Asian currencies including the rupee as nobody wants a strong currency to keep exports competitive.”

He added that next week, the rupee is expected to remain in the range of 82.90 to 83.50, broadly towards weakness.