Happy times for Indian expats as rupee forex rate jumps

Dubai - Indian expatriates will get an additional Rs500 on every Dh1,000 they earn in salary because of the rupee's free-fall versus the US currency.

It's a bonus for the salaried class of Indian expatriates in the UAE in 2016 as the Indian rupee's exchange rate jumped from Rs17.96 on January 1 to Rs18.46 on Tuesday.
So Indian expatriates will get an additional Rs500 on every Dh1,000 they earn in salary because of the rupee's free-fall versus the US currency. So if someone is earning Dh10,000 salary a month he or she will get an additional Rs5,000 and a Dh20,000 salary-earner will be rewarded with an additional Rs10,000 every month.According to longforecast.com, the Indian rupee versus US dollar may see a high of Rs73.10 by the end of 2016.
On Tuesday, the rupee extended its loss for the second straight day, slipping by another 14 paise to 67.98 per dollar on sustained demand for the dollar from banks and importers. The rupee dropped by 20 paise in two days. The rupee is expected to cross the Rs68 mark against the US dollar today.
"This week being a salary period and the rupee at its lowest levels in quite some time, we expect a good spurt in remittances and expats may make use of these good rates," Adeeb Ahamed, CEO of LuLu International Exchange, told Khaleej Times.
"The rupee opened this year at 66.17 against the US dollar and hit a high of 68.24 on January 28. If the trend continues the rupee can hit 68.35 and if strengthened it can go to a low of 67.62."

Xpress Money chief operating officer Sudhesh Giriyan said: "This rate [Rs18.50] is pretty close to the lowest the Indian rupee had fallen - 18.84 - in August 2013. The rupee could slip further unless there is a regulatory intervention." The depreciation of the Indian rupee is not a reflection of the Indian economy, but due to the US dollar gaining over the last few months, Giriyan said, adding: "Experts have predicted that the rupee could fall further and reach its all-time low."
There are a lot of external factors, which could be the reasons for the current depreciation of the Indian rupee. With over $3.22 billion going out of India in the first two to three weeks of January this year leading to the recent crash in the stock markets, the revision of the interest rates by the Fed by 25bps in December 2015 and the devaluation of the yuan in the last quarter of 2015 are a few factors that have hit the rupee adversely.
The Reserve Bank of India's decision to keep key interest rates unchanged at 6.75 per cent strengthened the Indian rupee against other currency peers.
 abdulbasit@khaleejtimes.com 
 

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