Friday, 5 July 2013

The Saga of Sliding Rupee…

Hot Brews
Italy Espresso - 83
Latte Americano - 96
Irish Grand - 135
Cold Brews
Legendary Cold Coffee - 137
Chilly FrappĂ© - 163
Lemon-Mint Iced Tea - 155

** Taxes Extra

“Hey Joe… what’s with the price hike?” ………………………………………………...

And I was there standing, waiting for that question to pop up! And it did. I knew this sudden, sharp rise in prices would put me in a court-like scenario. So I had to do my homework well. Get the facts and figures straight. It was going to be a long discussion.

Now might I also introduce you to the blaring, hot-topic doing the rounds today? Price escalations!  Well I'm sure majority of the world suffers from this global-economic epidemic. We are, too, in the race. And nothing short of!

Of course, with the fuel, land, and the exchange rates soaring high how could one expect to keep the coffee prices low? I mean look at the costs and pricing's of even the simplest and basic stuff you need daily. Eventually, even my coffee prices would be hit at some point. I couldn't pretty much help it. K

It's the Dollar v/s the Rupee
Well the root cause happens to be the depreciation of the Indian Rupee in context to the US Dollar. That’s the case with every emerging market economy, so they say. The news is all filled with those economists/ finance connoisseurs grappling with their respective opinions; and I only keep wondering how much more that slide in the value of rupee will hit me hard? Hit a common man hard?

Why isn’t anyone pruning from the grass-roots  Can anyone really join the dots correct? I hope someone does. In the meantime, I tried figuring out a few things on my own. Like how actually this inflation in prices does originate and ultimately how does it get construed in a vicious circle, a circle hard to knock off. 

So on the surface; it seems that the import business is hit the hardest due to this widening gap between the Rupee and a Dollar. One has to count more notes while importing. Whereas, that fall in rupee leads to a lesser export dominance, subsequently. So you, indeed, end up paying more to most of the generalised stuff.

Consider this. You have a monthly budget set aside. Now, of course, the increasing prices make the monthly budget topsy-turvy. So you keep adding to that budget. Again, and again, to keep up with your current lifestyle. So as the law goes – more demand = more supply. More money has to flow in, so obviously you work towards getting more. Probable job switches, probable hike in salary; which in turn makes the Company (or a prospective one) pay you more.

When the Company is paying more, their expenses are again increased. For many, cost of outsourcing then increases. And again the circle is looped in.

So the saga goes on. But I suppose, every dark cloud has a silver lining. Experts opine that this is the lowest the Rupee will go. And if it’s anything from now, it’s only going up. Steadily, bit-by-bit. For now, folks, let’s hope for the best.
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