By Pratap John
THE weak dollar to which the riyal has been pegged is eating into the earnings of two major expatriate groups in Qatar –- Indians and Filipinos — making their overseas assignments less attractive than they once were.
The riyal lost almost 11% to the Indian rupee and 15.6% to the Philippine peso in 2007, forex sources said yesterday.
An Indian expatriate who makes monthly remittances said he got just Rs10.75 to a riyal on the first day of this year against Rs12.06 on January 1, 2007. Yesterday the Indian rupee traded at 10.75 to a riyal.
A Filipino who got Peso13.35 to a riyal on January 1, 2007 had to be content with Peso11.27 on the first day of this year. This indicates a 15.6% fall in the value of their earnings in just one year.
Forex experts in Doha believe the Indian rupee may appreciate further on the back of higher inflows into the country from foreign investors who are trying to make use of the high yielding domestic assets.
“The recent cut in the benchmark interest rate by the US central bank (by 0.75%) has accelerated this and the expected 50 basis points (0.5%) cut at today’s Fed meeting will trigger further inflows from foreign investors into India,” a senior executive of an exchange house here said.
The Philippine peso, which was Asia’s best performing currency last year, gained about 16% in 2007.
A recent report said the peso may gain up to 12% against the dollar this year as the country’s central bank is unlikely to intervene in the market.
People in Qatar are already hit by inflation which shot up to 13.73% in September, just short of a record high.
The eurozone expatriates seem to have suffered a decline of about 20% in their purchasing power while the UK expats have reportedly lost about 12% in 2007.
The exchange house executive said: “The declining dollar and stoking inflation have come as a double blow to people, especially expatriates. Most expatriates do not have exchange rate protection on their wages.
“Some expatriates complain they have not seen any significant increase in their wages in the recent years, a reflection of which we are seeing at our counters. Although the volume of remittances is increasing, the value does not go up correspondingly.”
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=198778&version=1&template_id=57&parent_id=56
2 comments:
China and the UK are working to shift from the US dollar. Also the Middle East is building their economy to put this currency as a front runner now that the US is almost broke and of course the dollar will drop lower.
This is just.......well sad.....did any one ever think the dollar would get so weak and all the other countries getting currencies getting more and more valuable? How low can the buck go? We won't be able to afford to outsource any more, things will be cheaper here, maybe other countries will outsource to the US?
Post a Comment