DUBAI: Sep. 23: The sharp appreciation of rupee against US dollar has hit the NRIs in the Gulf hard at a time when the skyrocketing cost of living has already slashed their savings.
The UAE currency Dirham is pegged to the US dollar which has depreciated heavily as currency markets have dumped dollar in favour of other stable currencies. The rupee has risen sharply against the dollar recently.
In many of the GCC states like UAE, Qatar and Bahrain the cost of living has shot up mainly with house rents doubling in the last two years. The construction boom, which has placed hundreds of freehold residential properties in the open market has not helped as they are
all high value offerings.
Last year, inflation rates in UAE hit a 19-year high of 9.3 per cent. A larger number of expatriates working in the country are losing a major share of their earnings to inflation and currency depreciation.
"The Indian rupee has gained more than 14 per cent against dirham from the beginning of the year. The exchange rate losses, combined with the domestic inflation in the UAE is wiping out more than one third of the earnings of Indian expatriates working in the UAE," Sudhir Shetty, General Manager of UAE Exchange Centre, told Gulf News.
European, British, Swiss and Canadian expatriates too have suffered heavily due to depreciation of dirham. The dirham fell 17 per cent against the euro from December 2005 to end of August 2007 and a 16 per cent against sterling.