Dubai: The Indian rupee’s rise to a two-month high last week may be short-lived; the currency may hit its record low later in the year.
On Thursday, the Indian rupee hit its highest level in eight weeks, Rs67.21 per dollar, from the record low of Rs68.89 per dollar struck in late November last year.
“My take is the dollar would continue to be stronger. The situation may continue as we saw in 2016. It won’t be unusual if rupee touches record low levels again. A few sessions may make a difference,” Sudhesh Giriyan, chief operating officer at Xpress Money, told Gulf News over the phone.
Adeeb Ahamed, managing director with LuLu Financial Group, expects a level of Rs69 per dollar soon.
“While political changes do play a brief role in the global market, its effect on currencies cannot be defined over a long period of time,” Ahamed said.
The Pakistani rupee and Philippine peso are also expected to weaken. Pakistani rupee traded at 104.6 rupees against the dollar, not far from the record low of 108 struck in December 2013. Philippine peso is trading near 49.68 against the dollar, levels not seen since the fourth quarter of 2008.
Where the Indian rupee stacked against the dirham is concerned, Giriyan says the current rate offers a good opportunity.“Even 18.32 Indian rupees [for a dirham] is a decent level. If someone can wait can do so. In the region of 18.5 for a dirham is a very good deal,” Giriyan said. A dirham fetched a record Rs18.75 in February 2016.
Double-digit growth
Remittance companies have been witnessing double-digit growth in volumes and rapid expansion from companies such as Lulu and Xpress Money.
Xpress opened in 12 countries in Europe and Africa in 2016, and achieved 12 per cent growth.
“We plan to add another 25-30 countries in 2017. We are also looking at a few countries in Africa, Latin America, and the Caribbean. We are also riding the digital wave,” Giriyan said.
The remittance provider also tied up with Abu Dhabi Commercial Bank to remit money, and plan to collaborate with a few more banks.
Momentum
LuLu Financial Group opened 15 new branches worldwide last year, which included five new branches in the UAE, taking the total number of outlets in the country to 41.
“Going forward, we hope to maintain the same momentum and growth rate, leveraging through our well spread-out branch network and technology-driven innovation,” said Ahamed.
“With a number of initiatives been taken up for moving towards a digital tomorrow, we also believe that our businesses should keep up with the technological innovations of the time. With this in mind, we aim to move 30 per cent of our exchange and remittance business on to the digital platform by 2020,” Ahamed added.
Violent fluctuations in currencies and wobbly growth have led to turbulence in the global economy.
“Even amid the tough market scenario and challenges presented to us this year, the remittance industry has shown a steady growth during 2016,” Ahamed said.
The global remittance industry is expected to hit $626.4 billion in 2017 — growing at around 3.97 per cent compared to 2016, according to reports from the World Bank.
“Remittances continue to be a major contributor to the developing economies, and we expect a durable growth potential for the money exchange and remittance industry,” Ahamed said.
“Despite low oil prices, most of the GCC states have announced plans for converting their countries into world-class hubs. This will further give a boost to the exchange and remittance business in the region,” he added.
