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Dubai: After months of stability, the Indian rupee is sinking again due to higher oil prices, experts said on Monday.

The Indian rupee hit its lowest level in 13 months on Monday to 66.47 per dollar, extending its fall for a six straight day. The Indian rupee was quoted at 18.096 against a dirham.

Indian expats are taking advantage of the situation. Many have started rushing to exchange houses to send money home, though salaries have not been received yet. “Whenever there is a depreciation of Indian rupee, we have always seen people taking advantage of the situation,” said Promoth Manghat, CEO of UAE Exchange Group. He said exchange houses have been witnessing more remittances to India after rupee started its fall in the past one week.

“Definitely we see around eight to 10 per cent increase in remittances … That is the kind of pattern we see.”

“Rupee’s fall has to do with rising oil prices, which pressures balance of payments. Since import bill goes up, there is a higher outflow in foreign exchange, which leads to balance of payments issue,” Sudhesh Giriyan, chief operating officer at Xpress Money Services Ltd told Gulf News.

Indian currency had been stable due to similar moves in oil prices, but with the Brent crude touching more than $70 per barrel, many economists expect a higher import bill for a country, which imports 90 per cent of its oil requirement. Oil accounts for the highest import bill in the country followed by gold, which is also getting expensive.

Merchandise exports fell 0.7 per cent on year to $29.1 billion — its first fall in five months — and the trade deficit widened to $13.7 billion, according to government data.

Decent level

“Sentiment continues to be in favour of further fall in rupee, but we it’s difficult to predict the price level, From a remittance point of view, 18.03 is a decent level,” Giriyan said.

The rupee has lost nearly four per cent of its value since the start of 2018, and it is the second-biggest loser in the BRICS group.

“The dollar is in demand, and the rupee has to weaken naturally, so there is no question for the RBI to intervene. We didn’t see an intervention from the regulator when rupee was at a much worse level,” said a dealer with an exchange house, who did not wished to named.

The Indian rupee hit a record low of 68.86 against a dollar about a year and a half ago.

“We expect more weakness in the Indian rupee. The first level that needs to be watched is 66.90, and then 68,” said an analyst with a local markets advisory firm.

— With inputs from Sajila Saseendran, Senior Reporter