Indian Rupee has hit an all-time low as one Rial was valued at INR 200.70 on Monday. The money exchanges did relatively good business but failed to fetch customers as desired owing to many reasons.
The key factor driving the Rupee lower was a surge in the US dollar globally.
Crude prices are elevating to around $110 per barrel, which added further pressure on the Rupee. In addition to this, a forecast of 10 per cent inflation by the Bank of England and a tightening lockdown in Shanghai has also had Asian currencies depreciate against the Dollar.
People were welcomed to messages reading "INR hits a double century. Remit now and be part of this golden opportunity' since Monday morning and were invited to even competitive rates by different money exchanges. However, that failed to bring in as many customers as expected due to major festivals in the past few weeks.
"The good news for businesses in the Sultanate of Oman is that exports to India and imports from India are at an all-time high. This could help the businesses in Oman importing from India as well the exporters back in India," said KJ Prabu, General Manager, Mustafa Sultan Exchange.
It is evaluated that Indian Rupee hovering over 200 against one Omani Rial can be a good incentive for Non-Resident Indians as well. This is also a favourable time to plan investments in reliable assets, while investments in liquidity can be held for a while.
Expat Indians in the Sultanate of Oman, who celebrated many festivals in the recent past, including Eid ul Fitr, Easter, and Diwali, couldn't convert their savings into INR. Those who believed in Akshaya Tritiya had already invested their money in gold last week.
"Actually Dollar appreciated for many reasons," said sources from Al Jadeed Exchange.
Prabu said that the exchange, managed by India's largest bank, the State Bank of India, is very well equipped to handle this increased demand and has always been the case during such episodes in the past.
"We are witnessing a large number of customers and volumes to India, he added.
"The major reasons behind such a change is due to RBI increase in the repo rate to reduce the inflation, and also US Federal increased the interest rates. This has resulted in an increase in the volume of business due to the rate changes, said Supin James, Country Manager, Purushotham Khanji Exchange.
"Volume has definitely increased over the past few days. Customers who were holding amounts in their accounts have started sending at record-high rates. However, not many new customers were witnessed yet," said Rajeev, Global Exchange.
According to him, the reasons for a weakening Rupee are manifold. The aggressive rate hike by Federal Reserve (USA) by 50 basis points has resulted in a surge in the US treasury yield. Due to which Dollar has strengthened globally
Added to it, the Russian invasion of Ukraine has led to a surge in global crude oil prices. It has also negatively impacted the overall outlook on the INR.
These are coupled with the weakness in the domestic equity market, sale of Indian assets by Overseas investors (FII/FPI), weakness in other Asian currencies, and the lockdown in China, which have collectively resulted in the present scenario.
Reports suggest that the RBI has also been taking measures to support the Rupee by implementing a rate hike last week.
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