Rupee fall, festivals lead to surge in remittances from GulfSeptember 27th, 2008 - 11:35 am ICT by IANS
Dubai, Sep 27 (IANS) The fall in the value of the rupee against the dollar has led to a surge in remittances from expatriate Indians in the Gulf in the last couple of weeks, especially as the festival season is on back home.Exchange houses and banks in the region have reported that the fall in the value of the rupee, coupled with the ongoing Islamic holy month of Ramadan and Kerala’s harvest festival Onam, have contributed to the increase in remittances to India by around 25 percent.
“Our average monthly remittance to India is around Rs.2,000 crore (Rs.20 billion) but we expect this to go up to around Rs.2,500 crore (Rs.25 billion) this month (September),” Sudhir Shetty, chief operating officer of UAE Exchange, one of the largest exchange houses in the United Arab Emirates (UAE), told IANS.
As of Thursday, the day before the weekend starts here, one US dollar fetched around Rs.46.
With most currencies in the region linked to the dollar, expatriates are happy to get the increased rupee amounts they are getting for the same amount of local currency that they remit every month.
“Just 80.30 dirhams fetched Rs.1,000 Thursday,” Shetty said.
Stating that there has been a discernible rise in remittances, he, however, pointed out that Ramadan and Onam have been major factors for this too.
A large percentage of the over 4.8 million Indians in the Gulf hail from Kerala, where Onam is the biggest festival of the year.
“The positive swing is more due to Ramadan and Onam and other festivities than the effect of rupee value,” Shetty said.
“A lion’s share of remittances consists of small ticket blue-collar transactions for family support. They can’t withhold or send more with variations in monetary value. Big-ticket white-collar transactions send even through other channels including banks and might have local savings,” he pointed out.
Bank of Baroda, the only Indian public sector bank to have operations in the UAE, has also seen a rise in remittances through its branches here.
Average monthly remittances through the bank between April this year and September has risen by around 25 percent crossing the Rs.1 billion mark, it is learnt.
With the dollar rising to above Rs.46-levels in recent times, the highest in two years, similar surge in remittances have been reported from other Gulf nations too.
“After the dollar has gained momentum, people are sending home huge amounts. The volume of remittances has gone up significantly,” Thangavelu, general manager of the Eastern Exchange in Qatar told the Peninsula newspaper.
“Those who had been holding back their money are now keen to take advantage of the situation. We learned that some people are even taking bank loans to send money home,” he was quoted as saying.
Exchange houses in Qatar remain open till late during Ramadan and these have been crowded with expatriate residents sending money home ahead of the Eid-ul-Fitr, it was reported.
The story is the same in Saudi Arabia.
“In June 2007, I sent 1,000 Saudi riyals to my non-resident account and it fetched me around Rs.12,100. But after the rupee became stronger, for the same amount of Saudi riyals I got only Rs.10,500,” Amanulla, who works as a salesman in Dammam, told the Arab News.
“This made a huge difference to me and affected my family’s day to day spending in India, but now I am happy that things are improving and hopefully this should keep continuing,” he was quoted as saying.
According to a World Bank report this year, India is the highest receiver of remittances from abroad.
Around 5.7 million Indians from across the world sent $27 billion as remittances in 2007 and the Gulf accounted for a large chunk of it.