MUMBAI – With the ongoing fall in the rupee, the remittances volume has seen a massive spike as high networth individuals have started sending more money back home to cash in on the pricing difference.
While some pegged the volume increase up to 75 per cent, others have seen the business jumping up to 20 per cent.
The currency ended at 63.61 against the dollar today compared to 63.53 yesterday, which was 13-month low.
Global payment service provider UAE Exchange said it has seen a 70 per cent jump in the volume of high-ticket remittances in the last week alone.
“Although the number of transactions have increased by 20 per cent, we have seen high value remittances in volume terms surging by 70 per cent,” UAE Exchange vice-president for treasury Ashwin Shetty told PTI. The NRIs are remitting anywhere between Rs 25 lakh to Rs 5 crore, he added.
Last year the country led the chart in remittance inflows, by receiving a whopping $70 billion, followed by China with $60 billion and the Philippines with $25 billion. It had received $69 billion in remittances in 2012, and according to the World Bank, this year the inflows will touch higher levels.
“The fall in the rupee has positive impact on remittances from HNIs. We are seeing a jump of 15-20 per cent in the high-value remittance volume,” Xpress Money vice-president and business head Sudhesh Giriyan told PTI.
He said HNIs have high disposable income and they look for an opportunity when rupee falls to take advantage.
“Either they have accumulated funds or they borrow from banks of the respective countries at a cheaper rate and then send money home,” Giriyan said.
Typically, the last quarter is the time when remittances increase due to festive season. The rupee has been depreciating since early November on account of strong dollar. On November 3, the rupee ended at 61.40, after which it fell to 62.03 on November 28.
Between the beginning of November and till today, the domestic currency has depreciated by around 4 per cent. Besides strong greenback, widening trade deficit, muted foreign investment inflows and fall in global crude oil prices have also contributed towards fall in the rupee.
Analysts believe that the rupee is likely to fall to 64-65 levels in the coming days. According to Giriyan, remittance could further increase if rupee continues its declining trend.
