Muscat: With one Omani Rial now worth INR186, the Indian Rupee has plummeted to its lowest level in the last six months.
The rupee took the plunge alongside several other currencies from the developing world, as the result of a weak economy at home, as well as global events that affected its value.
PK Subudhi, the general manager for Mustafa Sultan Exchange, told Times of Oman that the behaviour of the rupee was “ volatile”.
“Because the rupee recently crossed INR186, we are offering rates of INR185.80 for every Omani Rial, but people have not yet begun to take advantage of this because Eid has just ended, so the salary cycle will begin again at the end of this month,” he explained. “Then, we will see people come to us when they want to send money home, but the rupee is currently behaving in a very volatile manner.
“I think this is the lowest it has been now for about six months,” added Subudhi. “Last October, the rupee did cross the value of INR194 for an Omani Rial, and that stayed till about January, but this is the lowest it has been since then. The economy in India is not doing well at the moment, and the Reserve Bank of India is expected to take steps to reverse this, and this has affected the stock market as well. It is not just the rupee that has been affected, but the Chinese Yuan and Brazilian Real have also been very badly hit.”
Speaking to Times of Oman, R Madhusoodhanan, the general manager for Global Money Exchange, said that on 5 August, the rupee had recorded its biggest ever drop in a single day in six years.
“Currently, we are offering an exchange rate of INR186 for one Omani Rial,” he said. “This rupee depreciation began in the first week of July, and since then, it has been slowly declining with the biggest fall in almost six years happening on the 5th of August. On the same day, the Chinese currency suffered its worst fall in 10 years, dropping because of the impact of the US trade tariffs on Chinese goods.
“The Indian expats who live in Oman and other countries are very happy, because the exchange rate is now better, and the IT industry is cheering, because they get more value for money for their services,” Madhusoodhanan added. “My feeling is that there is nothing to worry about yet, but this trend will continue for some time.”
The global geopolitical uncertainty, which included US President Donald Trump’s trade tariffs on China, and the ongoing protests in Hong Kong, a major business hub, have not just impacted the Indian Rupee, but many other Asian currencies as well.
Madhusoodhanan continued, “ There is a fear of global recession, so the central banks are reducing their interest rates, which means there is a threat on growth. These banks are taking steps to reduce their interest rates, and when this happens, people will move their investments to safer currencies. People are currently investing in gold, which is why its price has increased slightly.”
He said: “As far as India is concerned, the Indian economy is a big importer of gold. Just like oil, any import of gold will also have an impact on the Indian Rupee. On top of this, there was some concern that the government was going to impose taxes on foreign portfolio investments (FPIs)
“This was taken negatively by foreign investors and resulted in an outflow of money from the stock market,” he further added.