Why is so much money suddenly coming to India from THESE countries, and who is sending it?
Image for representational purposes
New Delhi: Due to the depreciation of the Indian rupee, the Indians living in the Gulf countries like the United Arab Emirates (UAE) and Saudi Arabia have increased remittances back to India. It is important to note that the rupee has weakened against the AED (UAE's currency), with one AED now valued at approximately Rs 23.5 — the lowest since the beginning of April. The fall in the rupee's value has prompted Non-Resident Indians (NRIs) to quickly send money home.
There has been an increase in AED-INR transactions since June 19. Officials at currency exchange houses say NRIs are no longer waiting for further depreciation. Those who have even a small amount of money are remitting it immediately. A senior official at a UAE exchange house told Gulf News, 'Last Thursday was the best day in recent weeks to send money through AED-INR.' He also mentioned that although the rupee briefly strengthened to 23.46, most NRIs continued to remit funds. Remittances Usually Dip in June
Remittances generally decrease in June. This is because many Indians spend on travel and other expenses during the summer holidays. However, this year, the pattern has changed due to decrease in the value of rupee. Remittance volumes remained steady even over the weekend and are expected to stay strong through Monday.
Officials from exchange houses say that if the rupee remains weak or falls further in July, it will benefit those sending money. One official said, 'If the rates stay at this level or drop again, it will be a double advantage.' Growth Seen Despite Geopolitical Uncertainty
It is important to note that the growth has come despite geopolitical uncertainty, including the conflict between Israel and Iran. Typically, such events lead investors to turn to the US dollar as a safe haven. However, this time, gold has played that role.
In simple terms, the decline in the value of the rupee has proven beneficial for NRIs. They are able to send more rupees to India while spending fewer AED. As a result, they are taking advantage of this opportunity and remitting more money home.
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