The Indian rupee touched record lows, but not everyone is worried

The Indian currency has fallen more than 7 percent so far in 2022 pushing up inflation and wrecking margins for importers

Mumbai, India – Chakradhar Chemicals, a medium-sized company that manufactures micronutrient and soluble fertilisers and farm equipment, has braved a lot so far this year. A surge in the cost of imported raw materials – metals and plastic – and a plummeting rupee slashed its profit margins drastically.

But when asked if there is a panic now that the rupee stands at the threshold of 80 to a dollar, and may soon fall further, Managing Director Neeraj Kedia says he isn’t losing sleep over it.

The calm is not unfounded. Raw material prices have normalised, and a similar depreciation in the currencies of his trade partner China have helped offset the hit to his business from the rupee’s fall.

Kedia says if the rupee falls further in the coming days, he may have to compromise on profit margins for a few months, but the long-term impact on his business will be negligible.

“Unless it falls to 85-a-dollar levels… then we will be in trouble,” he says.

The rupee has fallen rapidly to 79.97 a dollar – from 77.64 at the end of May and 74.55 on February 23, a day before Russia invaded Ukraine. It has already tested a record low of 80.0575 twice this week, recovering when the Reserve Bank of India stepped in to support it.

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