Value of Indian workers’ wages in Gulf may fall furtherApril 2nd, 2008 - 7:40 pm ICT by admin
Dubai, April 2 (IANS) The relative value of wages of Indian expatriates in the Gulf is likely to fall further with the Reserve Bank of India expected to announce interest rate hikes April 29, which in turn will raise the rupee value. A further increase in the value of the rupee would mean that Indians in the Gulf would have even less money to send home to their families, according to a report in the Arabian Business website.
There are around 5.5 million Indians in the Gulf and many of them work as contract labour in the booming construction industry in the region.
“Basically it (the rupee appreciation) makes India more expensive and much more difficult for expats living in the Gulf to send money home,” Marios Maratheftis, regional head of research at Standard Chartered Bank in Dubai, told the website.
The situation is further aggravated by the continued fall in the value of the currencies of five Gulf Cooperation Council (GCC) countries - the United Arab Emirates (UAE), Saudi Arabia, Oman, Bahrain and Qatar - which are pegged to the falling dollar.
This has also sparked off unprecedented inflation across the region eating into the earnings of the workers.
“We see this continuing theme over the next one to two months, unless of course the Gulf countries de-peg (from the dollar), revalue or both,” Maratheftis said.
According to a research note released by US investment bank Morgan Stanley March 31, there will be increased volatility of the Indian currency and higher rates at the end of April.
The construction industry in the Gulf region has been shaken by a series of strikes in recent times by expatriate workers demanding higher salaries.
“We think that inflation is the big issue in India,” Maratheftis said.
“It is an issue that authorities are concerned about and they are trying to be more aggressive in fighting it.”
According to a recent World Bank report, India leads the global list of remittance recipients, receiving $27 billion of the total remitted amount of $318 billion.
Tags: arabian business, bank of india, construction industry, contract labour, expatriate workers, gcc countries, gulf cooperation council, gulf countries, indian currency, indian expatriates, interest rate hikes, investment bank, morgan stanley, regional head, relative value, reserve bank of india, rupee, saudi arabia, standard chartered bank, united arab emirates