Remittances to India up as rupee sinks to 17-month low
The currency’s value started falling from April 9 when a single Omani rial could fetch you just under Rs167.5
Global Exchange CEO Madhusudhan said that he had almost immediately noticed an increase in the number of remittances after the rupee started falling
Times News Service
MUSCAT: The value of a single Omani rial appreciated to Rs176.50 on Tuesday, a 17-month high.
Moreover, remittances from Oman to India have risen nearly five per cent since the value of the rupee started falling on April 9, exchange houses said.
The rupee has now fallen to Rs68.02 against the US dollar. On April 9, a single Omani rial could fetch you just under Rs167.5. This makes it an increase of some Rs9 in just over a month.
Global Exchange CEO Madhusudhan said that he had almost immediately noticed an increase in the number of remittances after the rupee started falling.
“When the value of the Omani rial against the rupee started climbing, blue collar workers started remitting more money home, albeit small amounts. The increase in the rate of remittances has been hovering around five per cent,” he added.
Madhusudhan added that the value of the rupee would fall further as the factors responsible for its depreciation were still relevant. “When the Omani rial had climbed to over Rs.170, I had predicted that it would rise further to Rs175. Now that it has, I’m willing to bet, it’ll increase even more.”
“The factors that made the rupee fall are still very much out there. India exports some 80 per cent of its oil and the price of crude has risen to $78 per barrel (Brent). It has widened the trade deficit. This will also translate to an increase in the petrol and diesel prices and a rise in cost of transportation and goods for Indians,” he said. “The second factor is that people are pulling money out of the Indian market as the rupee falls. So, the rupee has been depreciating faster than many other currency. Moreover, the US dollar has strengthened. Another interesting thing to be noted is that the results of the Karnataka Assembly elections have been declared and it looks very much like a hung Assembly. This will mean a coalition government and the uncertainty that comes with it has shaken investor confidence,” he added. The Global Exchange CEO said that the rupee had been overvalued early last year, adding that it might have contributed to the situation today.
“The rupee had been overvalued at Rs63 against the US dollar for no particular reason and now it has come back to its original position,” he remarked. Madhusudhan said it was an opportune time for Indians to send money home, adding that they should make use of the legal channels. “It’s a good time to send money home. One can happily cash in by legal means. It is certainly a comfortable position to be in as far as Indian expats are concerned,” he remarked.