Remittances rise as Indian rupee slides

The exchange rate of one Omani rial against the Indian rupee was INR172.43 on Tuesday from just under INR167.5 on April 9

Times News Service

MUSCAT: A marginal increase in remittances from Oman to India has been noticed, said exchange houses.

The exchange rate of one Omani rial against the Indian rupee rose to INR172.43 on Tuesday.

On April 9, a single Omani rial could fetch just under INR167.5.

The trend is being noticed after the Indian rupee weakened against the US dollar. Since April 9, the Indian rupee has weakened by Rs.2.5 against the dollar. This has translated to Indian expats getting Rs.5 more for every Omani rial they send home.

Global Exchange CEO Madhusudhan said that the increase has been marginal, as it is still early days since the fall of the rupee.

“The value of the Omani rial may appreciate even further. So, some people are waiting and watching. Also, the slight spike in remittances is down to many blue collar workers sending more money home recently,” he added.

Madhusudhan said there were a host of domestic and international reasons as to why the Indian rupee had weakened. He added that the sharp rise in the price of crude oil was the main reason.

“India is a major importer of oil. Brent crude had been trading for $69 per barrel for two weeks. Today, it is trading at $75 per barrel. This is a sharp rise in a very short time period,” he said.

“Assuming an average crude oil price of $65 per barrel for the year, India’s crude oil import bill may increase 20 per cent to $105 billion in this financial year from $88 billion in 2017-18. This puts a major strain on the economy and the rupee,” he added.

Madhusudhan further added that the crude oil factor led to a domino effect that affected the value of the rupee.