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Rupee hits historic lows; indicates increase in remittances
As rupee plummets to a low, analysing past trend indicates an increased inflow of remittances
The Indian rupee stood at INR 47 against the US dollar in 2001, and at INR 83.43 in 2024 / Canva
The Indian rupee recently took a nosedive to an all-time low against the US dollar, with the country’s trade deficits indicating a potential investment opportunity for nationals residing abroad. The Indian rupee closed at a record low of 83.43 against the US dollar.
The fall in the rupee can be associated with the recent trade balance data, which revealed a widening deficit in February, to $18.71 billion from January’s $17.49 billion. Exports rose by 11.89 percent while imports surged by 12 percent.
How can NRI’s benefit from this?
Non-Resident Indians (NRIs) are set to benefit from the depreciating rupee. The rupee’s decline means that every dollar held a greater value.
This has previously triggered a surge in NRI remittances, particularly from countries such as the United States, the United Arab Emirates, and the United Kingdom.
In 2023 alone, India’s inward remittances stood at $125 billion, comprising 3.4 percent of India’s GDP according to World Bank estimates. The Reserve Bank of India’s simplification of regulations governing remittances, like the Liberalised Remittance Scheme (LRS) has further fuelled NRI investment activity.
Real estate could be a lucrative avenue for investment, alongside bank fixed deposits, like NRE and FCNR deposits. Moreover, the lower interest rates in India, coupled with the appreciating value of foreign currencies is lucrative for investment.
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