(MENAFN- Khaleej Times) Remittances from non-resident Indians (NRIs) are expected to pick up in the coming months, thanks to the upcoming festival and marriage seasons in India.
According to Promoth Manghat, CEO, UAE Exchange, many Indian expatriates had been holding back because of the rupee's sharp appreciation in recent months.
"Also, we are entering the festival and marriage season in India. With the rupee's recent weakness, we expect money transfer to India to pick up and increase till the year-end," he said.
Rupee volatility, according to Manghat, has suddenly picked up after three months of calm due to the confluence of multiple factors - disappointing GDP data at 5.7 per cent, rising current account deficit, geo-political tensions and US dollar strengthening. Significant inflows happened during the year because of foreign investors buying Indian government bonds. The quota allocated to foreign investors is almost full now and the expectation of incremental flows to the bond market is low," Manghat said in a statement.
The rupee fell to the year-low of 18.59 against the UAE dirham on January 18, 2017, but then continued to strengthen, reaching 17.32 on August 5. Over the last few days, the rupee has been witnessing mild volatility, trading in the range between 17.6 and 17.9. On Wednesday, the rupee was trading at 17.72 against the Emirati dirham.
He pointed out that the US Fed's unwinding of its balance sheet is expected to result in higher bond yields in the US, which might have a weakening impact on all emerging market currencies, including India.
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