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Weak rupee may bring cheer to NRIs, expats

Windfall for those sending money from abroad to families in India, expats in India earning in dollars but spending in rupees

Press Trust of India  |  New Delhi 

A sharp plunge in value to near Rs 55-56 levels against the may be bad for the markets and the economy, but the currency's depreciation may bring cheer to some including, NRIs remitting money from abroad and expats drawing salaries in dollars.

Amid a fall in and stock markets, concerns are rife about a slowdown in economic growth momentum. However, a weaker could mean good for the Non-Residential Indians (NRIs) and others remitting money from abroad to their families back in India, experts said.

The has not only lost sheen against the US but also against other currencies. One gets a little over Rs 55 now, which is nearly 12.67 per cent more than what it did on March 1. Similarly, a British pound brings Rs 86.73, (up 10.62%), euro brings Rs 69.30 (up 5.83%) and Australian Rs 54.02 (up 1.75%), a expert said.

India has one of the largest diaspora in the world after China estimated to be around 30 million. According to World Bank data, India received remittance worth USD 64 billion in 2011 - the top recipient among developing nations.

Windfall gains could also be reaped by expats working in India with income in foreign currencies like the US but incurring expenses in rupee, they added.

This is because in the short term, these employees are set to gain from a weaker as they earn more rupees from their dollar-denominated salaries, an HR expert said.
The on Thursday hit a record low of Rs 56.38 against the US While some recovery was seen on Friday but the remained above the 55-level. The has slid by a whopping 13 per cent since March 1, while market barometer Sensex has tanked by nearly 8 per cent in this period.
Besides, for those people who are planning a visit to India now, have a lot to cheer about as they will get good bargain for their home country currencies now.
This translates to having more spending power in India as compared to other favourite destinations like Singapore and Thailand. Each US now costs 1.28 Singapore Dollar, and 31.63 THB (Thai Bhat).
Commodity analysts also say that a weaker could also lead to a rise in gold prices, as investors tend to shift their focus away from riskier assets like stocks to the bullion market in such scenarios.
If this scenario plays out, it could result in gains for the existing gold investors.

First Published: Sun, May 27 2012. 14:23 IST