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How To Pay For A Foreign Degree?


wealthymattersIf you are aiming for a foreign degree,you are probably facing some financial challenges. A rapidly depreciating rupee is the first challenge. The second one is from the Reserve Bank of India a few days ago. In its bid to arrest the free-falling rupee, the banking regulator has brought down the amount of dollars one can take out of the country from $2,00,000 to $75,000 in a financial year. Education loans and remittances related to overseas studies are a part of the $75,000 limit.But the silver lining is that if someone wants to remit a higher amount, they can do so with prior permission of the central bank This offers a ray of hope for those who have the wherewithal, but for others the only way out is to prune expenses and redraw the strategy to fund education.

Almost 60-70% of students who go abroad will not find it difficult to adhere to this limit. However, in case of several programmes, particularly the MBA courses, the course fee itself will exceed the $75,000 limit. That means the RBI move could have an impact on some management programmes immediately.

Indian students are usually quite thrifty while studying abroad. In the US, for a post-graduation course, the annual fee is typically in the range of $25,000-40,000, on an average. Living expenses could be around $15,000 a year, depending on the lifestyle. If your total expenses — including course fee and living expenses — in a financial year exceed $75,000, you will have to make some adjustments to your plan. That includes compromising on the university or institution you have always aspired for. You could look for cheaper educational destinations. For instance, Australia, Germany, Singapore, and Canada are some of the countries that one can consider to pursue studies. The reasons are varied like low tuition fees or low living expenses and even work permits, which make these countries appealing.  Read more of this post

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The Sinking Rupee Through Foreign Eyes


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Here’s the Financial Times on the depreciating Rupee:

“the rupee has lost 57 percent of its value against the US currency since it peaked at 39.40 rupees to the dollar in February 2008”.

So basically foreign investors have lost over half the value of their original investment in India in dollar terms  in the previous 5 years.Or 15% per year.How many of their investments returned over 15% per year?Was the overall return so much better than the 1-2% returns in their own countries?Does it explain why Indian financial assets don’t seem so interesting to foreigners and NRIs?

Small wonder that the only Indian assets that Dollar owners want is real estate,So boys and gals get ready for another round of irreversible increase in the price of land and real estate.Even today,the average family can own an average Mumbai flat only by saving 10 lacs a year for 30 yrs and that’s not considering interest .Pray how many Indians have incomes that can allow such savings over a life-time?Get ready to be priced out of the market and become a life-long renter.

The Story Of The Falling Rupee


wealthymattersEven after independence in 1947,the Indian Rupee was still pegged to the British Pound. The peg to the Pound was at INR 13.33 to a Pound which itself was pegged to USD 4.03. That means, officially speaking the USD to INR rate would be closer to Rs 4. In 1966,the Rupee was devalued and was now directly pegged to the US dollar at INR 7.50 per Dollar. Till 1966, the Indian currency, which was pegged to the British pound, was an officially or unofficially acceptable tender over a large part of Asia and Africa, from Beirut to Hong Kong.After the devaluation, the Rupee suddenly turned a global pariah, with few takers anywhere.Exports did not surge as expected and Indian financial prestige suffered even further.

By 1985, India had started having balance of payments problems. The rupee had by then been depreciated to about 17/$ in the intervening 2 decades,By the end of 1990, the country  was facing a serious economic crisis. The government was close to default, its central bank had refused new credit and foreign exchange reserves had reduced to such a point that India could barely finance three weeks’ worth of imports. India had to airlift its gold reserves to pledge it with International Monetary Fund (IMF) for a loan.In 1991,overnight the Rupee was devalued by another 50% from about 17/$ to about 25/$. In 1993,the government allowed the Rupee to be traded by traders without a forced peg and it started to slide as the government was no longer controlling the prices, fully and started to reflect the reality. From about 27/$ it slid to Rs.35/$ by 1997. Read more of this post

Guesstimates Of The Value Of The Rupee


If you are looking for some guidance on where the Rupee/Dollar exchange rate is likely to stabilize,here are the best guesstimates from various financial institutions:

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