NRI remittances to go up
A fall in the rupee is likely to trigger an increase in remittances to India, as NRIs will earn more money for their dollars. Falaknaaz Syed reports.business Updated: Oct 24, 2008 21:05 IST
A fall in the rupee is likely to trigger an increase in remittances to India, as Non Resident Indians (NRIs) will earn more money for their dollars. NRIs remitting money to India will now earn Rs 50 to the dollar. Already the remittances to India have doubled. In the first quarter April-June of 2008, $12 billion were remitted to India against $7.8 billion in April to June 2007.
“NRIs are seeing an opportunity to send more money home with the depreciation of the rupee,” said Kiran Shetty, country manager, Western Union. “Around 40 per cent of remittances in India come from North American, 20-35 per cent from the Middle East and the balance from Europe.”
Though the average size of the transaction is capped at a maximum of $2,500 and the number of transactions at 12 in a year, the rise in remittance indicates that the number of people remitting have increased.
The rupee was around 40 to the dollar in February. Foreign education and foreign travel will get more expensive but the fall in the rupee will result in an increase flow of foreign tourists to India.
“NRIs will earn more rupees for their dollar,” said Parthasarathi Mukherjee, treasury head, Axis Bank. “The country's oil imports bill will rise thereby increasing inflation.”