Rising rupee makes Indian expatriates jittery

 20 May 2014 - 6:29

Doha: The recent surge in the value of the Indian rupee against the Qatari Riyal has made Indian expatriates nervous. They are rushing to exchange houses to send money home to get the maximum value out of their hard-earned riyals.
The rupee has risen around 5 percent, or 0.80 riyals in the past one month in anticipation of a turnaround in the Indian economy following a victory for a Bhartiya Janata Party (BJP)-led coalition in recent elections in India. The rupee has risen from 16.76 per Qatari Riyal on April 23 to 15.96 yesterday.
The appreciating rupee does not augur well for Indian expatriates, particularly the limited-income group, in Qatar as it erodes the value of the Qatari Riyal against the rupee.
“Many expatriates are advancing their remittances now due to recent strengthening in Indian rupee against Qatari Riyal. They are saying that it is better to send money right now as rupee is expected to rise in coming days,” Zuber Abdul Rahman, Operations Manager, Al Zaman Exchange. “We saw Indian expatriates rushing to send money on Friday (16 May) when election results were announced,” he added.
The rupee had weakened to a record low against the Qatari Riyal last year by touching 18.12 per Qatari Riyal in August 2013.
The recent rise in the value of the rupee against major currencies has been triggered by hopes of stability and economic reforms in India due to the landslide victory of the Bharatiya Janata Party in parliamentary elections. Foreign Institutional Investors (FIIs) have invested close to $6bn in the last three months in India in the hope that Narendra Modi will introduce economic reforms after becoming prime minister.
Indian expatriates expect the rupee to rise further in coming months as Modi has full majority in parliament, which ensures a stable government.
“After the results were announced, many of them chose to send money as early as possible while those who could not send money are still holding their money now. But these expatriates are less in number,” said a senior official working in a currency exchange. “Those rushing to send money are expecting the rupee to rise in two or three months,” he said.
However, experts believe that the rupee may not see further appreciation in coming days. Analysts tracking the Indian currency are of the view that the central bank would not allow the rupee to appreciate below 58 per US dollar (it was trading around 62 per dollar a month ago). In the event of further strengthening, it is expected to buy dollars to shore up foreign reserves to brace for tapering in the bond-buying programme of the US.
“The Reserve Bank of India governor would not allow rupee to rise now because it will hurt Indian exporters. The rupee is likely to see some stability now in coming days,” said Rahman.