MUSCAT, Jul 21 (Times of Oman): Indian expatriates are making a beeline at exchange houses to take advantage on the weak rupee, which helped them to fetch more money to send back home. This follows Indian rupee rising to a recent high of Rs122.88 against rial yesterday, as against Rs118-120 per rial for quite sometime and Rs120-121 a couple of days ago.
“People are sending more money as they were getting better rates. The exchange rate against rial has touched a recent high of Rs122.88 in the evening. This is the best rate since May 25,” Dr V. S. Kumar, general manager of Mustafa Sultan Exchange told Times of Oman.
However, a small section of high net worth expatriates still believes that the rupee may depreciate further to touch Rs124 against rial by weekend.
“Some indications suggest that the rupee may further weaken (against dollar) to Rs47.45 tomorrow and to Rs 47.70 by the end of the week,” said a prosperous NRI, adding, “if that happens, value of rupee against rial will touch Rs123.25 and Rs123.90, respectively. These are all subject to various other factors.”
“The growth in inflow of Indian expatriates is also aiding the rise in remittances this year,” added Tony George Alexander, chief executive officer of Oman UAE Exchange.
“There has been a phenomenal growth in inflow of construction workers to the country for implementing several mega projects. This also helps growth in remittances,” added Dr Kumar.
“The trend is likely to continue this year,” noted Tony.
Two types of customers
Sources at money exchanges also said that there are two types of customers – middle or low income group and high net worth individuals. The first category is generally not much bothered about the fluctuation in exchange rate as their families depend on remittances for their monthly expenses, while the second category waits for a better rate.
“Those who remit less than Rs25,000 are not bothered as they do not have any other option but to send money,” said another money exchange official, who does not want to be named.
Those who send money for investment purpose are taking advantage on the weak rupee. This section constitutes around 25-30 per cent of the total remitters. But the volume of funds they constitute is high at almost 60 per cent.
Dr Kumar said that there has been a 14 per cent growth in total remittances by end-June 2010, over the same period last year. The remittances to India will go up further from next month onwards, due to the forthcoming festival season.
In fact, several factors contributed to the recent depreciation of dollar against Indian rupee. Indian rupee fell to a six-week low against dollar after economic data from the US showed that the global recovery is faltering, stoking concern investors will cut holdings of riskier emerging-market assets.
The currency slid for a third day after India’s commerce secretary Rahul Khullar said that the country’s exports rose at the slowest pace in five months during June. The rupee is expected to stay under pressure again. It has slid 1.9 per cent so far this month, the worst performance among Asian currencies.