Indian expats in seventh heaven as rupee slumps to Rs15 vs. Dh1
Posted on May 23, 2012
Rupee plunges to record low for the fourth session in a row; now trading below Rs55 against $1
The beleaguered Indian rupee slumped to Rs14.98 against Dh1 yesterday at 3.30pm UAE time (11.30am GMT) as the Indian currency came under renewed pressure with oil importers swapping rupees with dollars to pay for crude to fulfil the energy-scarce country’s fuel demand.
Rupee has now breached the critical psychological barrier of Rs55 against $1, and has lost a quarter of its value in less than 10 months.
Importantly, experts don’t see a swift end to the suffering currency’s woes, expecting it to keep trending downwards barring any unexpected good news for the Indian economy.
Owing to the most favourable exchange rates they’ve been receiving of late, a large number of Indian expatriates in the UAE and across the Gulf have been making a beeline at remittance centres, sending back money in bulk.
The Indian rupee is a partially convertible currency, with the country’s central bank, the Reserve Bank of India (RBI) imposing certain restrictions on foreign currency movements.
While this has shielded the rupee from capital erosion in the past, the country’s domestic woes, including a weakening economy and a widening fiscal deficit amid global uncertainty thanks to Europe’s stubborn debt crisis has resulted in the rupee losing 25 per cent of its value in less than 10 months, from a high of Rs11.99 vs. Dh1 on August 2, 2011, to Rs14.98 on May 21, 2012.
This has prompted a number of Indians living in the UAE and elsewhere in the Gulf to remit their savings and, in many cases, borrowings to take advantage of the currency swap rate.
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