Those sending money home for Eid Al Fitr and summer holiday get more value for dirhams
Virendra Saklani/Gulf News ArchivesBUS_160620_MONEY EXCHANGE Expatriates remit money to their home countries at UAE Exchange branch in Sharjah on Monday. Photo:
Dubai: The weaker Indian rupee has become a boon for Indian expats sending money home for Eid Al Fitr and summer vacation plans.
The rupee has been falling significantly in the past few of weeks and hit its lowest low against the US dollar in 16 months on Wednesday.
The currency traded at 67.90 to the dollar after falling to a low of 68.13, a level last seen in last quarter of 2016.
Though it gained a little to touch 67 on Thursday, industry experts expect it to be under pressure in the coming days.
“The Indian rupee has strengthened temporarily against the US dollar today on account of geopolitical situation back home,” said Adeeb Ahmad, managing director, LuLu Financial Group.
“However, we believe that it could move between 67.40 and 68.30 against the US dollar in the coming few days,” he told Gulf News on Thursday.
While the growth pace for remittances has been modest this past year, Indian expats have made good use of the depreciated currency during this period to send money home at good exchange rates.
Remittances usually witness a slight spike during Ramadan and similar festive seasons, Ahmad pointed out.
“We do have a normal course of business but expect more business this time around for Eid due to favourable rates for the customer.”
While the choice of remitting funds for NRE savings lies with the remitter, he said there are a lot of opportunities for Indian expats to invest back home, and they should take advantage of the current exchange rates.
“High volume transactions are prevalent when the rupee goes down with remittances being done by people who hold back their money looking for better returns.”
Promoth Manghat, executive director of Finablr and CEO of UAE Exchange, said the rupee continues to be under pressure because of the increase in the interest rates in the US and looming oil price hikes.
“Since rupee has touched 68, people are waiting for it to weaken further though it strengthened today,” he said.
“Eid is definitely the festival period that witnesses more than usual remittance. We are expecting the expats to make use of weakened rupee to send gifts and other contributions for the festival.”
Since several families would also be heading for their summer vacation, high exchange rates are expected to spur remittances.
Some money exchange houses have already announced Ramadan promotions, which will further benefit Indian expats among other customers remitting money home.
Sharjah resident Nazim Hamrani, who hails from Gujarat, said he took advantage of the weakened rupee on Tuesday itself. “Getting good exchange rates ahead of Eid is always a good thing for us expats.”
Ajith Rajan, a Keralite living in Dubai who was planning to send money home for summer vacation said: “When I heard the rate was 18.42 yesterday, I thought it will fall further. But it is 18.38 today. I will just see the trend for a couple of more days before remitting.”