Explained: What happens if the rupee hits 80 against the US dollar

When the value of a currency falls, imports become dearer and prices of raw materials rise

The rupee closed at 79.88 against the US dollar on Thursday, just away from breaching the psychological 80-level. Since the outbreak of Russia Ukraine war in February, the Indian currency has sunk.

However, it is important to understand what happens if the rupee hits 80 against the US dollar.

What happens when the rupee touches 80 against US dollar?

Imports become dearer: When the price of a dollar goes up, importers need to pay more for the same number of dollars. As international trade is mostly in the US dollar, importers have to pay higher prices.

Exports become cheaper: The exporters