NRIs, hold your remittances

With the Indian rupee appreciating almost 9 per cent in the past nine or so weeks, Indian expats in the UAE and elsewhere have been on the receiving end of the foreign exchange fight, with the dollar (and therefore the UAE dirham) getting clobbered by the now mighty rupee.




Today, one UAE dirham is fetching about Rs13.2 compared with Rs14.62 that it fetched on December 15, 2011, a decline of 8.9 per cent in a little over two months. While last year, the Indian rupee was among the worst performing currencies in the world – declining by 18.7 per cent in 12 months – the Asian currency has gained a lot of traction since the beginning of 2012.



In a nutshell, Gulf expats remitting money have been receiving lesser mileage from their dirhams, dinars and riyals, with most having to remit more of their hard-earned cash to meet fixed exposures in their home country.



However, despite the fact that the rupee has had a decent run in the past 67 days, analysts believe that the rally will, sooner than later, lose steam and that the dollar (and therefore the dirham) may once again trump the Asian currency in coming weeks.



According to Abhijit Chakraborty, Senior Vice-President of Institutional Equity at India-based Fortune Equity Brokers, the rupee could once again fall to below 51-52 levels against the US dollar – i.e., one UAE dirham might soon fetch more than Rs14.15 again.