Rupee at 53 – Bonanza to NRI’s

Team CrawFin / Harshal Jawale, CFP^CM

Indian rupee is sliding almost daily these days. Since USD is appreciating against all currencies it is nothing to worry situation yet simply the pace of depreciation of rupee is creating waves. Yesterday Rupee broke its all time low and currently is trading at around 53/USD. RBI and Finance ministry too are not making any encouraging statements. For an import driven country like India (majorly Oil) this is probably the worst news in 4 year long global crisis. Widening fiscal situation will only make things worse.

Still it is definitely great news for another part of India who lives out of India, the NRI community. NRI’s who always look for higher rupees for their hard earned foreign currencies to remit money back to motherland for various reasons; this is one of best times. It is not only on currency front that NRI will benefit but also for making investments, fixed deposits are available at above 10%, equity markets are down by over 30%.

Rupee has fallen by about 16% since Aug 2011 against USD. More importantly it is not only falling only against USD but also against almost all global currencies. Pace of depreciation is so high that it makes Indian Rupee one of the worst currencies in Asia, next being depreciated only by 8%.

Even though some experts predict that Rupee will fall to 54-55 easily, I think it is not time to wait for fractional higher benefits at the cost of opportunity missed. It is not only NRI’s but also foreign investors who put many times large chunk of money into India are waiting at sidelines to enter. Intervention by RBI may also put break on rupee slide.

Every year India receives large money through remittance, about 55 billion USD in 2010 highest in the world. Current situation definitely makes it super attractive to remit more than usual. The moment India starts receiving this money in plenty the rupee will start appreciating probably at similar pace that of depreciation.

This article is dedicated to few of my friends sitting outside of India and holding USD for more than couple of years in anticipation of better cross currency rates. The rate have come, may even move up a bit, still the interest amount lost on deposits in banks is much higher.

Wealthy investment needs healthy methods!!!