KUWAIT: Moneyexchange centers across Kuwait witnessed an unusual rush yesterday, with Indianexpats scrambling to send money home as the Indian rupee tumbled to this year'slowest level yesterday. One Kuwaiti dinar fetched 236.93 Indian rupees, whilethe currency traded around 71.98 against the US dollar in forex markets,recording one of the worst performances in its history.
According toexperts, the rupee had been on a rollercoaster ride all along this year,primarily due to the weakening of investor sentiment, with the Indian economyshowing signs of a sharp slowdown. "There is a confidence crisis in theIndian market today, prompting foreign funds to flee the country. Manyindustries are also taking cover and biding time in view of the growingturbulence in the global market," said Deepak Chandra, a market specialistin Mumbai, over the phone.
Global ratingagency Moody's last week lowered the growth projection for India during 2019and 2020 to 6.2 and 6.7 percent respectively. The global economic outlook alsoremained cloudy following a sharp escalation of a trade war and signs of alooming recession. At the interbank foreign exchange, the Indian rupee openedweaker yesterday at 71.65 a dollar and went on to touch the day's lowest levelat 71.98. It finally settled at 71.81, down 26 paise against the Americancurrency, the lowest in 2019.
"Forexpatriates, the plunge of the rupee's value may appear as a bonanza as theycan send more money to India. But it is a matter of grave concern for Indiansand the domestic economy," said Satish Chandran, who works at aninvestment company in Kuwait City. "High value remittances to India haveincreased significantly in the last few weeks and volumes also have risen,"said Anasuddeen, an employee working with an exchange company in Salmiya.
However, manyforex specialists are of the view that a plunge of the rupee usually doesn'thelp expats in low-income categories much. They are not in a position toincrease the amount they regularly remit, they said. Although the Indiagovernment has initiated a few measures to bolster financial market sentimentand boost businesses, many key sectors continued to witness double-digit ratesof contraction in net sales in the April-June quarter of financial year 2019.Many experts are of the opinion that that the Indian currency may continue toremain volatile as both domestic and global economic prospects remainuncertain, at least for the short term.
By Sajeev K Peter