Expats reap windfall as Indian rupee hits all-time low against dollar

Published: 13 January 2025

Godwin Isaac K | NT
Doha

The steep fall in rupee value has presented a silver lining for Indian expats as they can send more money back home for the same amount of Qatari riyals.

Several expats told News Trail that the depreciation of the rupee has been beneficial to them as the Qatari riyal is now bringing them more rupees.

“With the festive season of New Year and Pongal approaching, this has been beneficial. I’m sending more than I usually do to meet the extra needs of my family but these favourable exchange rates have allowed me to send a bit more than I expected without additional cost,” an Indian expat, who requested anonymity, said.

“I’ve been working in Qatar for over five years, and every month I regularly send money home. This is one of the best rates I’ve seen so far. I’ve increased my remittances slightly to take advantage of the exchange rate. Even a small difference makes a big impact,” another Indian, Sakeer Hussain, said.

The Indian rupee slipped to its all-time low on Friday as the dollar remained firm ahead of closely watched U.S. labor market data. The rupee weakened to 85.97 against the US dollar, surpassing its previous record low of 85.9325 hit on Thursday. It ended the day at 85.9650, down 0.2% for the week, marking its tenth consecutive weekly loss.

“Some expats are likely to wait before sending money home as some studies have predicted that the value of the rupee will fall further, to 90-92 against the US dollar, this year,” said Abdul Raoof Kondotty, a community leader and finance expert.

Ahmed Amani, Dealer Manager at Eastern Exchange in Doha, provided insights into the trends affecting exchange rates. “After the US election, they implemented some strategies for Indian products, including a 100% tax on imports. This tax increase pushes rates higher, impacting exchange rates in Qatar as the dollar strengthens,” he told News Trail.

“For example, last year we purchased $1 for approximately 84.30 rupees, but after the election, it’s now crossed 86. If the dollar rate increases, obviously exchange rates will follow,” he added.

When asked if the fall has caused an increase in remittances to India, Amani said: “We didn’t see any big changes in people sending money due to this because this month is the festive season which has always been a peak period for remittances. I feel that the regular customers continue to send money based on their salary proportion.”

He also highlighted the challenges faced by exchange houses: “If we’re unable to sell dollars pur-chased at the previous rate, we incur losses. To mitigate this, we rely on value dates like ‘Tom’ or ‘Spot’ values to reduce our risk.”

A bank manager from India commented on the broader economic factors influencing the rupee’s depreciation: “The rising price of crude oil is driving higher demand for USD, as oil trade happens in USD. Speculations about the policies of the new US president, which may strengthen the dollar, are also a factor. Additionally, the withdrawal of investments by foreign institutional investors from India, with outflows in USD, is creating higher demand for dollars. Finally, lesser intervention by the RBI, in line with the policies of the new RBI governor, has also contributed to this trend.”