Gulf money exchanges are bracing for an unprecedented remittance rush sparked by the Indian rupee's plunge to a historic low against the dollar on Thursday.
Read on: Rupee's record plunge to trigger remittance rush
Exchange firms expect remittances to India to go up by six to eight per cent as most expatriate employees, who will soon be drawing their November salaries, would take advantage of Indian currency's dip to 68.8650 per dollar, way past its previous low of 68.8450 reached on August 28, 2013, or Rs18.65 against the greenback-pegged UAE dirham.
Important: Indian rupee to stay under pressure from surging greenback
The rupee tumbled to a new record low as global funds dumped Indian assets amid rising odds for a US interest-rate increase and as a slump in local yields dampened the appeal of the nation's debt. It is widely estimated by analysts to further decline on expectations that there will be little intervention by the Reserve Bank of India to stall its fall.
Also read: Rupee cracks 68-level, tumbles 32 paise
There is speculation that the dirham-rupee exchange rates could be far more attractive at Rs19.05-19.56 in the event of the Indian currency crossing the Rs70 barrier some time in the near future.
However, all Indian expats in the Gulf, who collectively send around $30 billion per annum to their country, are not overly enthusiastic to suddenly cash in on the windfall as some of them are in a real dilemma - whether or not to wait for the rate to cross Rs19 for every dirham. "I would rather wait to see if I could get better rates as the experts had forecast," said Rijesh Kumaran, an office assistant at a Dubai company.
Find out how: Rupee volatility to benefit NRIs
Sudhir Kumar Shetty, president of UAE Exchange Centre, said at times of such steep rupee depreciation, expats tend to send more than what they normally do.
"Along with those sending for family maintenance, middle-income and high net worth individuals also send more now, triggering remittance volumes significantly. There is a scarcity of hard cash in the Indian market due to the demonetisation of certain denominations among Indian currency notes. For this reason, NRIs tend to send more money to bank accounts," said Shetty.
He said more money is also being remitted to India as Christmas and New Year are round the corner. "Due to these multiple factors, we expect the remittances to go up by six to eight per cent," said Shetty.
Adeeb Ahamed, CEO of Lulu Exchange, said there has been a marked interest from expats in sending money home at better rates. "With the rupee hovering at the lowest level for quite some time, and looking at reports and expert views, remitters might be waiting to make use of the new low in the currency."
Taking the plunge
. Dives to a record low of 68.86 against the dollar