Fall of the rupee: how to manage your expenses abroad?


Continuing its descent, the Indian Rupee (INR) is about to touch the 82.00 mark against the US Dollar (USD). With the depreciation in the value of the rupee, spending abroad – whether for foreign travel, study abroad or importing goods – is increasing by leaps and bounds.

So, unless you can circumvent the exchange process, it becomes difficult to oblige overseas commitments.

Sasha Ramani, Director of Corporate Strategy, Mpower Financing, explains the difficulties faced by people due to INR devaluation and how to manage your overseas expenses in the current scenario:

Concerns over the continued depreciation of the rupee

This has profoundly affected the ability of students to finance their studies abroad, especially for the many Indian students who take out study abroad loans from Indian financial entities. Many of these students will run into a last-minute financial shortfall when their rupees no longer suffice to cover the cost of a US or other education abroad, especially in a time of high inflation.

To avoid unexpected setbacks, students who wish to study abroad should consider US dollar loans to cover the cost of their studies. Students who take advantage of dollar-denominated loans enjoy the certainty that they will have the funds available to them when they need to be used. They can also have peace of mind by not having to worry about exchange rates, and regardless of currency volatility or market turmoil, their funds are ready when needed. Companies like Mpower reduce one more hassle for students by disbursing loans directly to the university.

Increase in the number of dollar-denominated loans

We see students facing this problem all the time – they had enough money (in their national currency), but the depreciation of the currency affects what they can afford in the US – maybe during their last semester, senior year or longer. A strong dollar can therefore lead to a substantial increase in the cost of education for students and leave them stranded when their savings denominated in foreign currencies are no longer sufficient to finance their studies.

Fortunately, students have solutions to these last-minute financial problems – indeed, a strong dollar can be a blessing in disguise. The solution is for students to take advantage of US dollar loans, which are especially valuable in a strong dollar environment. Students (and their parents) who take out foreign currency loans are rushing to apply for additional loans or top-up funding so students don’t have to postpone their studies. But with guaranteed US dollar funds, students can be confident that they will have funds available when they need them, regardless of the future value of the dollar.

Increase in the number of supplementary student loans

At Mpower, we have seen a surge in interest from students taking advantage of our international student loans to help them with their studies in the United States and Canada. It’s not just because Mpower offers a loan in US dollars – which is a safer bet for students studying at US universities, but because we offer fixed rate loans. In an era of rising interest rates, this means that an Mpower loan rate will not increase over time. In fact, Mpower offers several easy interest rate discounts that students can take advantage of.

Students graduating from their studies abroad are increasingly refinancing their loans with Mpower. Refinancing allows students to benefit from a fixed (lower) interest rate and enjoy many other benefits while working in the United States.


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