If you haven’t noticed over this past week or two, the US dollar is on steroids, with its financial muscles bloating by the day.
And the brunt of its anabolic super-sized growth is being faced by other currencies across the world, with the greenback rising by a massive 76 per cent against the Russian rouble over the past eight months.
The rouble made a lifetime low of ք85.38 against the US dollar this past Thursday (January 21, 2016), having seen much better days before the global economic slowdown.
Consider this: On July 15, 2008, the rouble was perched at ք23.17 vs $1, and has since lost almost 73 per cent of its value against the ‘mighty’ dollar, which has appreciated a cool 268.5 per cent against its Russian counterpart.
It isn’t as if the issue is limited to the Russian economy and the rouble alone.
Exhausted Indian rupee
The Indian rupee, which was trading at around Rs15.88 vs the dollar-pegged UAE dirham on May 22, 2014, closed at a lifetime low of Rs18.56 vs Dh1 on January 20, 2016, a decline of 14.4 per cent against the UAE dirham (and, therefore, the US dollar).
Like the rouble, the rupee, too, has seen better days, once trading at Rs10.65 against Dh1 (November 10, 2007), implying that the UAE dirham and the US dollar have appreciated by a massive 74 per cent against the beleaguered rupee.
Other major expat currencies such as the Philippines peso, the Pakistani rupee, the Bangladeshi taka and Sri Lankan rupee – not to mention the British pound sterling – are all getting trumped by the dollar’s growing dominance.
While cashing in on the most favourable exchange rates ever that should be one solid reason for expats in the UAE and across the world to remit money back home in bulk right away, the head of a global remittance company suggests waiting a tad longer, if possible.
Sudhesh Giriyan, COO, Xpress Money, the global money transfer company that boasts of network of 170,000 agent locations worldwide, says he believes the dollar is set to become even mightier going forward.
“The Indian rupee may just go past the [intra-day] lifetime low of Rs18.85 vs Dh1 [Rs69.23 vs $1] that we saw in early September 2013,” Giriyan told this website last week, with the rupee tantalising close to the 18.55 vs Dh1 level.
When asked if expats should remit right away or wait, Giriyan said it was a “difficult call to make,” especially given the fact that most expats will be yet to receive their salaries for the month.
“The rupee may fall further by the end of the next week, just around the time most expats receive their salaries,” he said. “That may be just the right time to remit,” said Giriyan, who has been with the money transfer firm for over a decade now.
And what he said for the Indian rupee holds true for other expat currencies too.
The Philippine peso, for instance, breached the Rs13-mark against the UAE dirham for the first time in more than six-and-a-half years, falling to PHP13.06 vs Dh1 on January 21, 2016, depreciating by 15.6 per cent in two years, since hitting a high of Rs11.02 vs Dh1 on January 16, 2013.
Feeble British pound
The British pound too has depreciated to its lowest levels in more than six-and-a-half years, sinking to Dh5.17 vs £1 (£0.19322 vs Dh1) on January 21, 2016, its lowest since March 2009, and a depreciation of almost 18 per cent in as many months.
Tired Pakistani rupee
Similarly, the Pakistani rupee sank to a low of PKR28.94 on January 5, 2016 – its lowest since December 2013 – and depreciating by almost 10 per cent since hitting a high of PKR26.11 on April 14, 2014.
Anaemic Sri Lankan rupee
The Sri Lankan rupee made a lifetime low LKR39.48346 vs Dh1 on January 5, 2016, and once traded at LKR27.39 vs Dh1 (on September 4, 2006). The Sri Lankan currency has depreciated by more than 10 per cent in about 16 months, from a high of LKR35.39 vs Dh1 that it registered on September 22, 2014.
Rigid Bangladeshi taka
Interestingly, the Bangladeshi taka has held on to its value much better than some of other Asian tigers and even =global currencies such as the pound and the rouble. The taka did however trade at BDT21.50 on Friday, January 22, 2016, its lowest since March 10, 2013, but that was a decline of just under 3 per cent in 30 months, since hitting a high of BDT20.86 vs Dh1 on August 23, 2013.
So, should you go remit right now? We’d suggest keep the powder dry as the best time to remit may be near, if it isn’t already here.