KUWAIT: The Indian rupee, the most volatile among its Asian peers, plunged to an all-time low of Rs 274.9 against the Kuwaiti dinar on Monday, weighed down primarily by rising geopolitical tensions in the Middle East and growing recession fears in the US economy. But currency exchange houses in Kuwait continued to experience lackluster business as residents adopted a “wait-and-see” approach, even as Asian currencies remained on a downward spiral in successive sessions.

“Usually, we experience a remittance rush when the Asian currencies drop against the Kuwaiti dinar. But strangely enough, the transaction count is significantly low these days,” said Illyas Ahmad, a sales executive at an exchange company in Kuwait City. The Indian currency tumbled 31 paise to settle at an all-time low of 84.03 against the US dollar

on Monday following an unprecedented sell-off triggered by fears that the US may be tipping into recession following weak economic data last week. Bourses from Asia to Europe also took a beating.

The rupee has been on a losing streak for more than two years, largely due to the strengthening of the dollar and weakening of investor sentiment in India. Asian currencies – particularly those of India, Pakistan, Bangladesh, Sri Lanka and the Philippines – have also been more volatile compared to more stable currencies like the US dollar, euro, Swiss franc, Japanese yen or British pound. The safe-haven yen and franc surged on Monday.

One Kuwaiti dinar fetched 194 Filipino pesos on Monday if the transaction amount was below 50,000 pesos and 188.25 if the remittance amount was above 50,000. The Pakistani rupee also tumbled to 910 against the dinar on Monday, while it is being traded at 935 if the transaction amount is above 50,000 Pakistani rupees. The Sri Lankan rupee also remained volatile, trading at 994 against the dinar on Monday.

“Remittances to Bangladesh in taka remain suspended following a directive from the Central Bank of Bangladesh in view of the current political turmoil in the country,” said Joshua Abraham, a forex specialist at an exchange company in Kuwait. However, he said the Egyptian forex market is stable following intervention by the central bank and remittances to the country are being transacted smoothly. He attributed the significant drop in money transfers from Kuwait despite favorable forex rates to the weary summer season and the still ongoing illegal hawala money transfers to some Asian countries.

Over the last few years, the Indian rupee has devalued against the US dollar by about 60 percent. Most GCC countries including Kuwait have seen a significant amount of US dollars coming in as FDIs, making their currencies stronger. “For residents, the weakening of the rupee usually is a blessing in disguise, as they can send more money to India. Ironically, this time around, residents do not appear much enthused to capitalize on the weak currency. Either they may be waiting for further depreciation of the rupee or because of the financial climate, which may not be very conducive,” explained Ahmad.