Contrary to common perception that foreign travel, especially tour packages and foreign travel related expenses have become expensive following the ongoing depreciation of Indian rupee against the dollar, travel experts feel that travel to Asian countries and some emerging markets have in fact become cheaper in the last one year as the depreciation of Indian rupee is relatively far lower than its peers.
In the last one year all major currencies have declined significantly against dollar. For example the Malaysian ringgit has depreciated by 32.6 per cent, Thai baht by 11 per cent and Turkish lira by 34 per cent to name a few.
But Indian rupee has only depreciated by 9.2 per cent. This indicates that overseas travel for Indians have become cheaper over the last one year, travel experts said.
According to Karan Anand, Head, Relationships, Cox & Kings, travel costs to countries such as Malaysia, Thailand, South Africa and Australia have become cheaper by 10 to 15 per cent as their currencies have depreciated against the dollar.
“This is good news for Indian travellers who will have to pay less while travelling to these destinations,” Mr. Anand said.
Experts said that they were yet to see any major impact on foreign travel after the Indian rupee depreciated sharply amidst high volatility recently. However, they said travel costs to in North America and Europe have gone up in the past few days because the dollar has appreciated in the past few days.”
“We have not noticed any adverse impact on foreign travel so far. But travel to the U.S. and Europe has become slightly expensive. Currencies of emerging markets have been badly battered in the last one year and considering this, the Indian rupee is in the safe zone. According to some analysts the Indian rupee has in fact become stronger by 15 per cent. So many of the destinations have become actually cheaper,” said Sharat Dhall, President, Yatra.com
He added, “People are actually better off as compared to last year.”
CRISIL Research, in a report, said that the significant loss posted by Indian rupee in the last few weeks has brought back memories of 2013, when it had depreciated 24 per cent to 68 a dollar in a matter of four months. However, the current scenario is different than what we saw in 2013.
“While our external vulnerability has declined, the frequency of global shocks has increased. Compared with 2012, the growth inflation mix in India has turned for the positive – with inflation climbing down and growth picking up. In contrast, in other emerging economies, such as Brazil, growth is expected to decline further in 2016 while inflation is estimated to pick up,” CRISIL said.
It said all these have reflected in relatively lower depreciation of India’s currency, this year, compared to peers. “The rupee has depreciated nine per cent year-on-year, while the Brazilian real has fallen 58 per cent, Malaysian ringgit 32.6 per cent, and the South African rand 23 per cent,” CRISIL added.
