The Indian rupee, which recently fell close to 17.50 against Qatari riyal, is soon expected to touch 18-mark against riyal, experts say, adding it is just the matter of time.
The rupee plunged to 17.44 against riyal on Monday and closed at 17.33. The free-fall has widened the smiles of Indian expatriates who plan to go on holiday to celebrate Christmas and New Year. The rupee has fallen close to nine percent since April when it appreciated to 15.96 against the riyal.
“Going by the persistent fall in the rupee in the recent months, we expect it to breach 18 against the riyal in the near future.
“Strengthening of the US dollar will lead to further depreciation of the rupee. With oil and gold prices heading down, the dollar has become a favourite of global investors,” said Zuber Abdul Rahman, Operations Manager, Al Zaman Exchange.
“It is unexpected gain for many Indian expatriates because of the festive season. The rush of expatriates, especially Indians, to currency exchanges to remit money and buy currency is usually high during Christmas and New Year.
“Schools are closed and families leave for India to celebrate with their loved ones there,” added Rahman.
The rupee has fallen over 40 percent in the past four years. It quoted at 12.05 against the riyal by mid-September 2010, and plunged to 17.30 late in August of 2013. It touched an all-time low of 18.80 in September last year.
The rupee is following other major currencies which are continuously depreciating against the dollar. Buoyed by signs of recovery in the US economy, the Federal Reserve has decided to stop the bond buying programme, known as Quantitative Easing.
Interest rates in the world’s largest economy are expected to rise in coming months leading to strengthening of the dollar as global investors chase it.
The recent fall in gold and crude oil prices have supported the fall of the rupee and other currencies against the dollar.
The depreciation in the rupee will benefit Indian expatriates and augurs well for exchange houses.
“The depreciation in the rupee has created rush among Indian expatriates to send money home. They want to make the maximum out of the riyal now.
“The rush is likely to continue,” said a senior official of a currency exchange.
The depreciation of the rupee is unlikely to have major impact on the Indian economy because of the sharp decline in the crude oil prices.
Source : The Peninsula / Sachin Kumar