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The rupee has weakened to near 90 against the dollar due to which imports have become expensive and the risk of inflation has increased. But in this environment, people receiving remittances are benefiting the most because the value of every dollar coming from outside is now converting into more rupees. Due to this, their monthly income has increased and they are getting more relief than before in expenses ranging from household expenses to medical and education. This is the same section for whom falling rupee is proving to be a bonus.
New Delhi. The Indian Rupee is under pressure these days and a new low level is being formed in the market against the Dollar. This is worrying news for the common people because inflation, imports and travel make everything expensive. But there is another side to the story also. As soon as the rupee weakens, there is a class whose income suddenly increases and more money starts coming into the bank account than before.
These are the people who receive remittances from outside. That is, families who receive money every month in dollars, dirhams or euros from their relatives working abroad. The weaker the rupee, the more their earnings are converted into rupees. This week the rupee reached a new record level against the dollar and with this the happiness of the people receiving remittances also increased.
Who is getting the benefit?
Indians working abroad send billions of dollars to India every month. When the dollar is reaching around Rs 90, the amount received by sending one dollar has become much higher than before. Suppose earlier someone used to send 1000 dollars, he used to get around 82000 rupees, but now around 90000 rupees are coming in his account. That means, without any extra hard work, the earnings themselves have increased. Indians working in Gulf countries, America and Europe seem to be the happiest at this time because the exchange rate itself has become a bonus for them.
Direct impact on the income of Gulf Indian families
Indians working in Gulf countries send the maximum remittances. The money coming from Saudi Arabia, UAE, Qatar, Kuwait and Bahrain supports millions of families every month. Due to weakening of rupee, there is a significant increase in their monthly income because the value of Dirham and Riyal also increases with the dollar. Due to this, the budget for household expenditure in states like UP, Bihar, Kerala and Andhra Pradesh can be prepared with some ease.
Are concerns increasing for the government and RBI?
Due to weakening of rupee, the income of some people increases, but it brings pressure on the country’s economy. Imports become expensive, petrol and diesel prices get affected, companies’ costs increase and inflation starts going up. Therefore RBI continuously intervenes in the market so that the rupee does not fall too much. Stability in currency exchange rate is the biggest priority of the government.
What effect will be seen next?
If tension in the global market, war, US interest rates and crude prices remain the same, then the dollar may remain strong and the rupee weak. With this, the income of families receiving remittances may increase slightly. But this is a mixed situation for the economy because on one hand there will be pressure on domestic prices and on the other hand there will be some support from foreign inflows.
