The rupee's value has depreciated significantly against the dollar.

From Rs 45 around the same time last year, it has dropped to Rs 54 to a dollar levels currently.

Well, you may not have the time to track the rupee's movements but, ignoring it may turn out to be a costly mistake.

A depreciating rupee pegs up the domestic price of gold and diamond jewellery as also the price of imported gadgets.

Don't shop for gold

We tell you few splurges that are best avoided in times of a falling rupee.

If you can postpone your shopping for gold, diamond and silver jewellery, do it.

All precious metals and gemstones consumed in India are imported from different countries for which payment is predominantly made in US dollars.

So, when rupee depreciates, it increases the cost for importers as they will now have to pay more to get the same quantity. This reflects in the prices charged, here in India, shooting up.

Sample these numbers: In the last one year, gold has risen just three per cent in dollar terms. However, domestic prices of consumers'gold is up 27 per cent, following a depreciation of 19 per cent in rupee.

If you can wait for rupee to inch up, you can actually buy more gold for every rupee. A smart shopper will buy gold when rupee is up and sell old gold ornaments when rupee is down.

Go desi

For the same reasons, prices of imported articles be it books, apparel, mobile phone, a smart TV, car or a laptop will be higher now.

Price of some exotic imported varieties of apple, grapes and orange will also be higher.

Before you buy any imported product, remember that the extra amount you are shelling out is not for a higher value addition to the product but only for the difference in the currency's value.

Defer foreign trip

Are you planning a summer vacation? Hill-stations in North India or locales in the East of the country would be a good choice.

Scrap your foreign vacation plans. With rupee having lost significant value against the greenback, the cost of stay, food and transport in the US has risen for Indian tourists. Europe could not be an alternative choice as rupee is down against the Euro too. Rupee is at about Rs 70 to a Euro now, down from Rs 64 in last May.

Travel to popular Asian destinations- Singapore, Malaysia, and Dubai is also costlier. Considering just the currency impact, a vacation at Singapore will be 18 per cent more expensive now than last year.

international funds

International funds especially those linked to the US markets have delivered stupendous returns over the last 1-3 months. For instance, MOSt Shares NASDAQ-100 exchange traded fund has delivered a return of 12 per cent over the last three months. This is misleading given that the NASDAQ-100 index itself has generated a return of 2 per cent only. The depreciation in rupee has pegged up the NAV of the fund. So, while evaluating global funds, pay heed to their actual returns rather than the currency led appreciation in the fund's value.

craji@thehindu.co.in

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