Expatriates from India, Pakistan, Bangladesh and the Philippines are putting their remittances on hold - temporarily – as their currencies strengthen against weakening US dollar amidst growing fear about US debt crisis.
Money exchange dealers told Emirates 24l7 said the uncertainty about the US government debt talks is a major concern for the people, who are waiting for the market to stabilise before sending their salaries to home countries.
Indian, Pakistani, Sri Lankan, Philippines and Bangladesh currencies have appreciated against the US dollar and UAE dirham over the past one month on the US debt default fears. The Indian rupee dropped below the benchmark of 12 to a dirham on Tuesday. On Wednesday, Indian rupee continued to strengthen with the draft rate for Rs1,000 crossing Dh84.60. The UAE dirham has also weakened for it is pegged to the greenback.
Viju Ommen, Executive Manager (Operations) at Al Ahlia Money Exchange, said: “All the major currencies have strengthened against the dollar and dirham for the past one month, resulting in lesser number of people sending remittances to their homes. The weak dollar has caused a severe impact on remittances and people who can afford are holding back their remittances. Ordinary people who send money to their families will send, whatever be the rate, but the higher income group will hold back their remittances and wait for the exchange rates to stabilise. The economic slowdown had a considerable impact on remittances, causing a 20 per cent fall, and now the strengthening currencies could further reduce remittance outflows.”
The exchange’s major remittances are to India, Sri Lanka and the Philippines.
Vijaya Kumar, Chief Representative of Federal Bank in Abu Dhabi, said the Indian rupee has appreciated a bit more but the trend is temporary. “The rupee strengthened further on Wednesday, but the trend may not last long. The rate may come down after sometime because the industrial growth may be affected by stronger currency. The dollar weakness has affected all Asian currencies, but I think it will be a short-term phenomenon.”
Sajith Kumar PK, CEO of JRG International, DMCC, said the weakening dollar and uncertainty about US debt ceiling are lifting other currencies. He said the institutional investors may move to safer havens like gold which could push up yellow metal. All other currencies, euro, Australian dollar and Canadian dollar are also strengthening against the dollar.”
Today’s Exchange Rate (Evening House/UAE Exchange)
One Dhiram = 29.72 Sri Lankan Rupee
23.47 Pakistan Rupee
11.97 Indian Rupee (Appreciated)
11.42 Peso (Not much appreciated)
20.30 Bangladesh Taka
Gold - $1619 per ounce (Touched $1630 per ounce)