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Fri 24 Oct 2008 08:56 AM

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Rupee value fall prompts money transfer flurry

Indian expats now getting 30% more for their money compared to June.

Expats sending cash back to their families in India are getting more than 30 percent more for their money compared to June, as the rupee hit a record low against the dollar.

The Indian currency fell for the seventh day running on Thursday on speculation that the central bank’s decision to raise the limit on loans Indian companies can get from abroad would fail to increase the supply of foreign exchange in the local market.

The rupee slid by 1.2 percent to $49.86 before trading at $49.76, making it the worst currency performer among the 11 most active Asian currencies, according to Bloomberg data.

The move caused a flurry of money transfers between the Gulf and India as Indian expats moved to take advantage of the favourable exchange rate.

All Gulf states, bar Kuwait, peg their currencies to the dollar, meaning any change in the value of the dollar against other currencies is mirrored by Gulf currencies.

“Since June of this year we’ve seen the Indian rupee depreciate in value against the US dollar by over 30 percent, so for those people that are sending funds back to India it’s a great time to be doing so,” Eren Cayan, a senior trader at First Rate FX in London told Arabian Business.

On Wednesday, we reported that British expats were getting 23 percent more for their money compared to November last year when sterling hit a 26-year high against the US dollar.

The British pound fell to its lowest level against the dollar in more than five years on Wednesday after Bank of England governor Mervyn King said the country is heading for recession.

The dollar hit a two-year high against the euro on Wednesday due to the worsening global economic outlook, with the euro dropping to $1.274, its lowest level since November 2006.

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Madhukar 11 years ago

See and compare dollar to rupee exchange rates from ICICI, SBI, HDFC, Citibank and Remit2India at http://www.dollar2rupee.net/