The Hindu Business Line : Balance of Payments

According to the Reserve Bank of India, the current account deficit of 2007-08 was cushioned, inter alia, by private unrequited transfers that grew significantly by about 45 per cent to about $42.5 billion (Business Line, July 1).

Although their detailed break-up is not available it is widely known that most of the transfers are in the form of remittances from non-resident Indians, besides withdrawals from their accounts in India.

One important reason for the buoyancy was the steep appreciation of the rupee against the dollar.

This made it necessary for the NRIs to remit even more dollars than before so that their families in India would continue to receive the same amount of rupees.

Now that the rupee has stared depreciating the above-mentioned trend may not continue, especially because of the inflationary conditions in the West Asian region.

These circumstances have been making it difficult for the expatriates to make both ends meet.

A. Seshan Mumbai

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