Dubai: The strengthening Indian rupee sparked by a landmark election result has put the country’s expat workforce here in a fix.
Many are undecided whether to wait for recovery of the dirham or remit money as soon as possible. “I am not sure if this is a temporary improvement of the rupee or the first steps towards sustainable growth under a new government. I have decided to hold on to my remittance plans for a few more days,” said sales executive Ashish Mathur who secured a personal loan of Dh200,000 just days before the declaration of the election results.
On May 16, the day the BJP came to power in India, the rupee fell under 16 to the dirham for the first time since June 19, 2013. This was followed by long queues at nearby exchange houses with people hoping to get the best possible rate before an anticipated slump.
Lulu International exchange saw an almost 20 per cent spurt in remittances compared to the daily average in the past week with volume also up.
“The people’s mandate went towards the belief that the new government will stabilise the Indian economy, strengthening the rupee. In fact, expats had started rushing to remit money in anticipation of a sharp strengthening of the rupee right since the exit polls,” said Adeeb Ahmad, the company’s CEO.
“The general sentiment is that the rupee will only strengthen from here. We can expect a drop in the number of remittances, but not in the volume of transactions in the near future,” he adds.
The rupee is expected to further strengthen after the prime minister’s swearing-in ceremony and hover around Rs15.50-Rs16 to a dirham for the time being, say others. UAE Exchange that oversaw almost $14 billion (Dh51 billion) worth of remittances through its exchange houses in the country last year however said it was business as usual.
“There’s no major change in volumes despite popular belief the new government will stabilise the Indian economy and strengthen the rupee,” said Y. Sudhir Kumar Shetty, COO, global operations.
“Currently the rupee is steady to an extent that developments in the Indian political space have not yet made any significant impact on the remittances as such. NRIs seem to be on a wait and watch mode as of now,” he said.