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Indian Rupee Increases and Impacts on UAE

United Arab Emirates : 13 April 2010

The Indian Rupee has soared in value by more than 11% since this time last year and this week saw its position strengthening further against the US dollar culminating at a nineteen month high. This was an unfortunate development for many Indian Exporters living in the UAE. It is impacting on them because the dirham is aligned to the US dollar so any decrease in the dollar reduces their exchange values also and many Indian expatriates in the UAE convert the dirham to rupee before sending this money back home to their families in India.

This financial set back is aggravated further by the fact that although they are now getting less rupee for their dirham all of their living expenses in the UAE remain the same meaning they need more rupee to live here and have even less to send back home. As if this wasn’t causing them enough consternation household living expenses in India have also increased by about 15% over the last twelve months. At present it is estimated that there are approximately five million Indian nationals living in the six Gulf-Co-operation countries of Kuwait, Oman, Bahrain, Qatar, Saudi Arabia and the UAE.

However while the appreciating rupee has caused financial difficulties for many, for many UAE-based exporters it is a different matter as it means there is an increased demand from India for many products as imports are now costing them less than before. However the converse will be true when the markets readjust themselves again.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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