A sharp plunge in rupee value to near Rs 55-56 levels against the dollar may be bad news for the markets and the economy, but the currency's depreciation may bring cheer to some including, NRIs remitting money from abroad and expats drawing salaries in dollars.
Amid a fall in rupee and stock markets, concerns are rife about a slowdown in economic growth momentum. However, a weaker rupee could mean good news for the Non-Residential Indians (NRIs) and others remitting money from abroad to their families back in India, experts said.
The rupee has not only lost sheen against the US dollar but also against other currencies. One dollar gets a little over Rs 55 now, which is nearly 12.67 per cent more than what it did on March 1. Similarly, a British pound brings Rs 86.73, (up 10.62%), euro brings Rs 69.30 (up 5.83%) and Australian dollar Rs 54.02 (up 1.75%), a forex expert said.
India has one of the largest NRI diaspora in the world after China estimated to be around 30 million. According to World Bank data, India received remittance worth USD 64 billion in 2011 - the top recipient among developing nations.
Windfall gains could also be reaped by expats working in India with income in foreign currencies like the US dollar but incurring expenses in rupee, they added.
This is because in the short term, these employees are set to gain from a weaker rupee as they earn more rupees from their dollar-denominated salaries, an HR expert said.
The rupee on Thursday hit a record low of Rs 56.38 against the US dollar. While some recovery was seen on Friday but the rupee remained above the 55-level. The rupee has slid by a whopping 13 per cent since March 1, while market barometer Sensex has tanked by nearly 8 per cent in this period.
Besides, for those people who are planning a visit to India now, have a lot to cheer about as they will get good bargain for their home country currencies now.
This translates to having more spending power in India as compared to other favourite destinations like Singapore and Thailand. Each US dollar now costs 1.28 Singapore Dollar, and 31.63 THB (Thai Bhat).
Commodity analysts also say that a weaker rupee could also lead to a rise in gold prices, as investors tend to shift their focus away from riskier assets like stocks to the bullion market in such scenarios.
If this scenario plays out, it could result in gains for the existing gold investors. PTI