Indian expats feel low as rupee hits new high

Dubai - The currency rose by another 15 paise to close at 64.11 against the dollar.

Indian expats are downcast after the rupee rose to a 21-month high against the dollar on Thursday. It is expected to stay at current levels or surge further as the country's economy remains positive and foreign investment grows.
The currency rose by another 15 paise to close at 64.11 against the dollar. The previous highest was in August 10, 2015 when it fetched 63.87 to the dollar.
Some Indian residents in the UAE can afford to hold on to their dirhams while others have monthly commitments back home. Many have loans to pay off and bills for their families, which means they have to shell out more dirhams to meet expenses.
So what is aiding the rupee's rise? "Strong capital inflows into equities and debt instruments such as bonds," says Sudhesh Giriyan, COO, Xpress Money.
The Indian rupee gained about 5.5 per cent this year, making it one of the best performers globally. "There is a possibility that the rising rupee might make Indian exports more expensive. From a remittance perspective, the Indian diaspora (including the GCC), will find that their usual remittances buy fewer rupees back home. The rupee's strength reflects India's current economic growth, political stability, and attractiveness as a destination for foreign direct investment flows," he added.

Dubai resident S.D.Ravi Kumar said PM Narendra Modi's demonetisation and the BJP's performance in recent elections in Uttar Pradesh,
 Uttarkhand, Manipur and Goa has put the rupee on a stronger wicket. GDP growth has also been impressive. "By June, when the monsoon hits, foreign fund flows will indicate the real strength of the rupee. Based on these factors I will remit money only in June."
Anjali Nair, a self-employed Dubai resident said: "With the current fluctuation in exchange rates, I will not send money."
"Many Indians are now delaying remittances, hoping for a better rate so that they can send higher amounts," said Y. Sudhir Kumar Shetty, President, UAE Exchange.
He said that the impact of the rupee's appreciation on the exchange business is minimal. "The primary reason for this is that 85 per cent of the remitters from Gulf region are sending money for the maintenance of their families. Irrespective of the fluctuations in currency, they have to send money home."
India continues to attract foreign funds for roads, railways, aviation, defence, seaports and renewable energy. "The flow of dollars into the country will keep the rupee rather stable," Shetty said.
Abhilash Mathew, a marketing manager at Nikai Group, said it makes more sense to hold and not remit money now. "With the fluctuations in the currency, we need to wait and watch. When you want to remit large amounts, even slight currency dips make a huge difference."
Others like Prashanth Perichatra, a Dubai resident, said there is no point holding on to extra cash. "Remit now. Put it in a fixed deposit or other term deposits for higher returns."
 sadhya@khaleejtimes.com