DUBAI Remittances to India by white collar workers jumped by a sizeable 15-20 per cent in the last couple of days after the Indian rupee plummeted to a two-year low on August 24.
Promoth Manghat, CEO, UAE Exchange said: “With festivals round the corner, we do see a hike in remittances during this period. But the sudden fall in the rupee value has impacted remittances inversely, propelling them by a significant 15 to 20 per cent.”
Great opportunity
He said: “The fall in the rupee means a lot to Indian investors, because unlike those remitting for family maintenance, they tend to be more opportunistic in their approach. They send a large quantum of money for investment. Since their families are not technically dependent on it, they can afford to wait for a favourable rate, whereby they get more rupees per dirham. Hence, a weaker rupee is a great opportunity for Indian investors.”
Sudhesh Giriyan, COO, Xpress Money, said: “The current level of the rupee is very attractive for customers, especially white collar remitters, to send money home. The rupee has crossed the 18 mark against the dirham and we haven’t seen such levels post-August 2013. As against the dollar, it is already at 66. Initially, it was around 65.20 and from there moved to 65.80 and now it has broken that barrier and crossed 66.”
He said: “There is a big increase in remittances, particularly from the white collar remitters who wait for a good rate as they unlock huge amounts of money that they had held on to. When the rupee is around 65.50-66 levels, people also take loans and send money home at one shot.”
He said although the rupee is in a depreciation mode since last week, it may not see any further fall. “Even if the rupee slides further, we expect that the regulators will come into play and take necessary action. The rupee depreciation is a rub off from the devaluation of the Chinese yuan which happened about 10 days ago. The rupee has seen a fall from 64.25 to 66 in no time, which is about 2.5 per cent.”
But should people hedge their dirhams against the rupee or the dollar?
Giriyan said: “Even if we hedge the dirham against the dollar, eventually people will convert that into the local currency. From that point of view, today we get more rupees to a dollar or to a dirham since the dirham is pegged to the dollar. Also, interest rates are very decent in India if people put money in fixed deposits.”
