Rupee high against Gulf currencies blows low-income Indians

By Staff
|
Google Oneindia News

Dubai, Apr 19 (UNI) The 'sudden' appreciation of the Indian rupee to a nine-year high against the Gulf currencies is being sen as a further blow to middle and low-income Indians already groaning under rising cost of living.

The rupee peaked at 11.31 for the Qatari Riyal in the local foreign exchange market on Monday, but eased to 11.40 yesterday, currency operators told 'The Peninsula' of Qatar.

The rupee has been appreciating for quite some time due to a constantly weakening US dollar, to which the riyal is pegged.

Doha-based Indian bankers say what pepped the rupee up suddenly is a string of monetary control measures the Indian Central Bank has taken recently.

The increase in the Cash Reserve Ratio (CRR) of banks announced by Reserve Bank of India (RBI) pepped up the rupee.

Forex traders said the new CRR limit has sucked liquidity from the Indian banking system, to the tune of Rs 250 bn.

There is huge pressure on the rupee and it is not easily available which explains its sudden appreciation against the dollar, he said.

They said the repo rate has also been raised by the RBI which, in turn, has led to an increase in the domestic deposit rates.

The rupee had begun appreciating late in March but the development was initially rejected as a fiscal year-end phenomenon. But it seems the trend may continue for a while, they added.

UNI

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