MUSCAT: After remaining relatively stable for nearly two months, the Indian rupee weakened sharply on Monday, falling by nearly 58 paise against the US dollar in a single trading session.
The rupee opened at 95.62 against the US dollar before slipping to an intraday low of 96.24. It later recovered slightly to close at 96.20.
Meanwhile, exchange houses in Oman were offering around ₹249.70 for one Omani rial, giving Indian expatriates more value for every rial remitted home.
For thousands of Indians living and working in Oman, the rupee’s weakness has translated into a financial windfall.
The Omani rial, which is pegged to the US dollar, has strengthened significantly against the Indian currency over the past two years.
In 2024, one Omani rial was worth around ₹220 on average and rarely crossed ₹230. Today, it is trading in the ₹247-249 range, representing a gain of nearly 15 per cent for Oman-based earners.
The impact on remittances is substantial. An expatriate sending OMR500 home each month would have received roughly ₹110,000 in 2024. At current exchange rates, the same transfer is worth nearly ₹125,000—an increase of about ₹15,000 without any increase in salary.
Speaking to Times of Oman, Adv. R. Madhusoodanan, a Muscat-based financial expert and former State Bank of India (SBI) official, said the rupee has once again come under pressure due to a combination of factors, including heightened geopolitical tensions in West Asia, rising crude oil prices, increased demand for the US dollar and continued capital outflows from Indian equity markets.
He noted that global benchmark Brent crude was trading above $85 per barrel, while the US Dollar Index, which measures the greenback against a basket of major currencies, remained elevated at 101.24.
“Shipping costs, including war-risk insurance premiums, have already risen significantly, adding to the import bill of oil-importing countries such as India. This is expected to widen the current account deficit,” Madhusoodanan said.
“The prevailing global uncertainty is also likely to fuel inflationary pressures in oil-import-dependent economies like India.”
He added that the Reserve Bank of India (RBI) has been actively intervening in the foreign exchange market to curb excessive volatility. Recent measures, including the easing of norms for Foreign Currency Non-Resident [FCNR(B)] deposits, have helped boost India’s foreign exchange reserves by nearly $7 billion, taking the country’s total reserves to around $674 billion.
However, sustained foreign investor outflows from Indian equity markets continue to exert pressure on the rupee, he said.
While a weaker rupee benefits expatriates by increasing the value of their remittances, it also raises the cost of overseas travel, medical treatment abroad, foreign currency loan repayments and education in foreign countries.
“The rupee is likely to remain volatile in the near term. Its direction will largely depend on developments in West Asia and the extent of the RBI’s intervention to stabilise the currency,” Madhusoodanan added.
