Expats cheer as dirham fetches more Indian rupees

Dubai: The Reserve Bank of India may be having sleepless nights over the relentless fall in India’s rupee, which hit a record low of over 70 per dollar, but expats from India are certainly happy.

Importers in that country, on the other hand, had little to cheer about.

The Indian rupee on Tuesday extended its fall to a record low of 70.0800 against the dollar, before closing 0.05 per cent lower at 69.8925, as traders suspected an intervention from the central bank.

“There has been a lot of excitement among members of the Indian community here in the UAE as the Indian rupee touched a historic low (crossing 19 to a Dirham) for the very first time ever,” Sudhesh Giriyan, chief operating officer of Xpress Money Services, told Gulf News.

A dirham was fetching 19.03 Indian rupees compared to 17.26 rupees in January.

“Expats need to make use of this considerable fall and plan their investments or savings accordingly. Those looking to send out large volume transfers may gain a bit,” Adeeb Ahamed, managing director at LuLu Financial Group, said.

Around two million Indians in the UAE prefer to transfer their salary back home because of a higher rate on deposits.

They also make investments in property and other assets.

In the fourth quarter to December, non-resident Indians remitted Dh14.8 billion to India, which topped the list of remittance beneficiaries.

“Indian remitters, especially the white collar group, tend to wait for such opportunities to remit higher amounts of money as they receive more value for every dirham that they send back home. Remittance volumes to India have certainly received a boost owing to the weakening of the Indian Rupee and we are likely to see a similar trend over the next few days,” Giriyan said.

Market experts expect a further depreciation in the rupee.

“Mounting oil prices are also a major concern, as well as threat, for the Indian rupee. If corrective measures are not taken, we are of the opinion that the Indian rupee could even test 70.50 against the US dollar by year end,” Ahamed said.

The rupee, which has shed 11.5 per cent of its value since the start of the year, has kept its position of being Asia’s worst performing currency intact.

“I am happy that the same amount of transaction in dirhams to India would result in a larger amount of rupees, but sad on the other hand that the rupee is getting weaker by the day in its overall purchasing power,” Anurag Kashyap, a Senior corporate executive in a health care firm based in the UAE, said. “This is sad for importers too as they would buy costly dollars to pay for the raw materials and equipment that they use.”

Indian importers are not likely to be as happy as the expats. A weaker rupee means an importer now pays more rupees for goods.