Rupee gives expats sleepless nights

DUBAI — Low and middle income groups of Indian expatriates in the UAE have voiced concern over the low exchange rate of the rupee against the dirham as the dollar weakens further.

By Riyasbabu

Published: Sat 27 Oct 2007, 8:38 AM

Last updated: Sun 5 Apr 2015, 4:55 AM

Even though the exchange houses report that the volume of remittance to India still continues to remain high, many Indian expatriates, especially the labour force, complain of lower savings with the rupee getting stronger and the dirham-rupee exchange rate hovering around Rs10.5.

Statistics provided by the exchange houses show that the Indian rupee strengthened 14 per cent against the US dollar in the past 18 months because of the increased flow of dollar into the Indian market during this period, especially investments in property, mutual funds and shares and stocks. As a result, while the dirham fetched an average of Rs12.5 per until July last year, the value dirham has dipped to Rs10.5, sources at the exchange centres in Dubai said. Voicing concern over depleted savings and low exchange rates, Faisal Mohammed, an Indian expatriate, said, “I have been working in Dubai for past five years. The attraction for every Indian to come to the Gulf countries was the strong exchange value of the UAE dirham. I am earning Dh3,500 a month and send Dh1,500 home every month. I was getting Rs19,000 in exchange for Dh1,500 earlier, but now I only get around Rs17,000. Losing Rs2,000 every month has affected my family’s household budget in India and wiped out my savings.”

“If the current trend of weakening of the dirham continues, there will be no point living here. It’s a difficult situation for all,” Mohammed added.

Rajesh Kumar, another Indian expatriate, shared the same sentiments and said, “I took a personal loan of Dh5,000 last month to send home for carrying out renovation of my home in India. If I had taken the loan earlier, it would have fetched at least Rs65,000 against Dh5,000 but now I barely managed to get Rs52,500. With the dirham weakening, a lot of people like me have lost huge amounts because of low exchange rates.”

Shiby Subran, a labourer in Al Quoz, said that the labourers are the worst affected.“Most of us earn an average of Dh500 a month, of which many of us send home at least Dh300 every month. Earlier, the same amount fetched me Rs3,700 for Dh300, but now I barely get Rs3,200 which has made a big difference in my family’s budget.

Speaking to Khaleej Times, Sudheer Shetty, General Manager of UAE Exchange said the low exchange rate of the rupee against the dirham has not affected the remittances to India. “There is only a marginal fall in remittance because a large segment of our customers are from the lower and middle income workers who have no choice but to remit money home to support their families.”

“However, the number of transactions for investment and business to India has declined marginally in the past 18 months. If the trend continues it would create problem for the Indian expatriates here,” he added.

Arshad Adil, cash in-charge at Al Fardan Exchange in Dubai, said, “We notice that the number of transactions to India have decreased in the past few months, but not a large volume. Most of the customers are worried about the low exchange rates.”