India feels impact of weakening rupee

CNN's Mallika Kapur reports how India's weakening rupee is having an impact on its economy.

It’s not just financial pundits and currency experts who are talking about the rupee. It’s a hot topic across India. Take a look at those papers, the Indian Express says on its front page: Another day, a new low. The rupee has fallen around 20% versus the dollars since the beginning of this year, and it’s currently hovering around a record all time low.

Why is there such a sell off?

General fears about global instability, particularly how a U.S.-led strike on Syria could affect oil supplies in the Middle East. That’s affected all emerging markets. But the reason it’s hit the rupee so hard is that India is already struggling with a massive current account deficit because it imports a large more it exports.

The biggest imports, oil and gold, both are priced in dollars and prices of both commodities surged this week. But basically anyone paying for anything priced in dollars including an education is struggling.

Mumbai’s Aditya Hurry has just started college in Boston. We caught up with him before he left. Hurry says the rupee was at 55 against the dollar when he applied to college. Not even a year later it’s around 70. Luckily, he says, he’s got a bit of scholarship and he plans to get a student job to ease the financial burden.

“Working as a research assistant or as a teaching assistant, working in a coffee shop on campus or working in a cafeteria, that kind of thing.”

His parents too are figuring out how to deal with this unexpected fall in the rupee’s value.

"We dip into our savings a little more. We encourage him to keep up his grades so this scholarship continues."

It’s a financial strain, but Kavita Hurry says she believes it's worth it.

"These are once in the life. You do this only once and I think of all the things I would want to give the kids, it's a decent education."

As Aditya started his college career, she has some advice for him.

"If you are going now to a foreign country, then make it good and start working in that country because if you come back to India and start earning in rupees, it's never going to pay that amount that you spent."

Kavita Hurry says a few years ago she would have insisted her son come home after college. She says India was shining then. It isn't anymore.

Mallika Kapur, CNN, Mumbai.