The Indian currency hit a record low earlier this week, prompting expats to take up loans in order to take advantage of the exchange rate.
Indian expats in UAE cash in on rupee's record low
DUBAI // Indian expatriates are sending home as much as Dh1million at a time as they take advantage of the weak rupee.
Exchange houses say expatriates are taking out loans, requesting salary advances and even using overdrafts and credit cards to remit cash since India's currency hit a record low of 58.98 to the dollar this week.
"There has been a [rise] in the number of Indians taking advantage of the weak rupee, especially when it reached the 58 mark," said Adeeb Ahamed, chief executive of LuLu Exchange. "We have seen a 20-30 per cent increase in volumes."
People were able to get 15.69 rupees for a dirham yesterday afternoon at LuLu Exchange after the Indian government took measures to stabilise the rupee.
Mr Ahamed said that despite government intervention the trend could continue for another month or even longer.
"This is the right time as people can get a better rate of interest in Indian banks. Expats are taking out salary advances and personal loans. Some are even coming with credit cards and asking us to take money out on them," he said.
"Our managers tell them it can't be done and it is not advisable to go overboard by withdrawing from all sources. People should take advantage - but be cautious."
Faisal Kaithandi, a sales executive, was among those cashing in.
"I took a salary advance of Dh20,000 from my company to send money home," said Mr Kaithandi, who earns Dh10,000 a month. "The rate is low now and I want to send as much as possible. I'll somehow manage the living expenses for the next two months."
Dharmendar Bangera, 36, has already sent 175,000 rupees (Dh11,120) in the past two days. "Once I get my salary, I'll try to send more," said Mr Bangera, a manager at an entertainment company.
He said although the rupee slump reflected the poor state of affairs at home, his rising bank balance made up for it. "When we are here, we are happy about the weak rupee," he said.
UAE Exchange, which was quoting 15.60 rupees for a dirham yesterday afternoon, said it had seen a "10 to 12 per cent" increase in remittance volumes since Friday.
"Those who send money home monthly, such as blue collar workers, we don't see a spike in the money they send but they will get more value back home," said Promoth Manghat, the firm's vice president of global operations.
"But those who time their remittances, so people running businesses, in influential positions or who are keen to close loans back home, they are sending Dh100,000 to Dh1 million."
Mr Manghat said lack of investor confidence and political uncertainty were to blame for the rupee faring so badly at the moment.
"No one anticipated such a sudden movement, so much slump in the past two to three days."
Many blue collar workers were thrilled that their monthly remittances would fetch more.
"My wife will be happy she is getting more," said Mohammed Moinudheen Khan, who works in the construction industry.
Jawaharlal Rathod, a labourer, was able to remit 12,250 rupees for Dh800. "It is good my family will receive more money."