DOHA: The Indian rupee fell to an all-time low of Rs17.30 to a Qatari riyal in the local foreign exchange market yesterday after tumbling to Rs63 to a dollar.
After their uptake, exchange houses and banks here were offering Rs17.23 on average per riyal, which is pegged to the dollar at QR3.64.
The depreciating rupee is triggering remittance flows to India at a feverish pitch, sources in banks and exchange houses said yesterday.
Remittances on the Indian sector have actually been increasing since the rupee hit lows of Rs16 upwards to the riyal sometime ago. Speculations are rife, backed by opinions among some local Indian bankers and exchange operators, that the rupee might continue to dip until general elections in India in mid-2014.
“The rupee-riyal rate was actually Rs17.30 early yesterday but the currency slightly firmed up by evening,” said an official of an exchange house active on the India sector.
Exchange companies and banks said remittances to India had increased feverishly, especially as Indians in business here were joining their salaried compatriots in wiring money home.
“There is rush among Indians to transfer money,” said the exchange official, asking not to be named since he was not authorised to speak to the media.
The latest trend is that Indian businessmen have begun sending money home, he added.
A leading Indian banker here confirmed Indians in local trade and industry were indeed cashing in on the trend as a falling rupee offered more value for riyals.
The banker, though, wouldn’t comment when asked if he thought that would somewhat affect bank deposit volumes in Qatar. The rupee has been the worst performing Asian currency this year.
“In the three months of May, June and July alone it has lost 16 percent to the dollar,” said Akshay Randeva, from the Qatar Financial Center (QFC) Authority.
The dip basically began with increasing interest rates in the US and that started sucking back foreign funds parked in India, he suggested.
But Randeva added that alone was not to blame. A yawning current account deficit and structural issues are also at play, he added.
Financial experts advised Indians against taking bank loans and remitting funds home since that doesn’t make sense due to the rupee fast shedding value.
Indians from the southern state of Kerala who are in proxy businesses, including neighborhood stores trade, are said to be particularly swayed by the rupee’s fall, and remitting funds home.
Low-income workers, with little access to bank loans, are said to be sending home the last penny they can squeeze from their meagre savings.
Ironically, less economically aware Indian expatriates seem to be happy about the falling rupee and sending money home, largely for savings,
Those familiar with what a depreciating currency means in terms of rising costs, are highly concerned as consumer inflation at home is now touching almost 10 percentage points.
“Anyway, a silver lining is that Indians are more savings-oriented and whatever the reasons, they are at least sending money home for investment (savings),” said a banker. The Peninsula