Price relief elusive despite economic gains

Despite the rupee’s impressive recovery against the dollar, which led to a declining trend in the landed cost of imported items, mainly petroleum products, over the last six months, consumers have not experienced any significant price relief. This situation indicates that the market players have deliberately not passed on the real impact of the global decline in commodity prices, thanks to the government’s utter failure to diligently monitor the prices. Currently trading at Rs277.91 in the interbank market, the dollar has significantly decreased from its peak of Rs307.10 on Sept 5, 2023. A robust local currency, coupled with a downward trend in world commodity prices and reduced transportation costs, provides a strong rationale for stakeholders to pass on the impact to consumers. However, market analysts suggest that the negative impact of a massive hike in power and gas charges on locally produced items cannot be ignored.