By Sajeev K Peter

KUWAIT: Most foreign exchange companies in Kuwait have been witnessing an unusual remittance rush over the last few days as Indian expats seem to be cashing in on a weakening Indian rupee, which hit an all-time low on Monday. One Kuwaiti dinar fetched 249.4388 Indian rupees on Tuesday, after it marginally recovered from Monday's closing rate of 250.0145.

The rupee remained volatile against the US dollar on Tuesday, although it edged higher to Rs 77.23 against the greenback. The rupee had dropped to its all-time low against the US dollar to close at 77.50 on May 9.  "We are seeing a significant spike in the volume of remittances to India, although the counts have not increased proportionately," said an executive at a leading money exchange company on Tuesday.

The rupee continued to trade at record lows on Tuesday at local currency exchange houses, encouraging Indian expats, both high net-worth residents and people from low-income segments, to transfer money to India. Tom Fernandes, a currency specialist at a local exchange company in downtown Kuwait, said the Indian currency has been on a rollercoaster ride for the last few months. "The rupee touched an all-time low yesterday, making it more conducive for Indian expats to send money home. Not only volume, but the number of transactions is also increasing considerably," he said.

According to forex market experts, the Indian rupee could depreciate further amid risk aversion in global markets due to multiple reasons, including persistent outflows of foreign funds and a firm dollar. A broader selloff in the global markets triggered by the hike in interest rates by the US Federal Reserve also contributed to the volatility of the rupee. The raging war on Ukraine and persistent growth concerns in China due to the resurgence of COVID have also led to the currency plunge, the experts point out.

Interestingly, some Indians are betting on a further plunge in the value of the rupee. "I am not in a hurry to send money home now. I will rather wait and see. The exchange rate may get even better in the coming days," said Indian national Zainudeen Ahmad, who works at a restaurant in Maliya.

The depreciation of the rupee may be beneficial for Indians living abroad, but its impact on the Indian economy is not very positive, as imports become costlier, the experts said. The falling value of the rupee could also fuel domestic inflation, but at the same time a weaker rupee could attract more foreign investors into the country in the medium term, they added. "I sent 10,000 rupees to my father in Kannur for just KD 40.200 yesterday. This is a good time for people like us," said Kunjahamad, summing up the general view of the average Indian expat.