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POSTED BY ON August 26, 2012 12:53 pm COMMENTS (2)
Hi Manish
First of all – thanks for an extremely educative & responsive website as well as QA Forum.
A close family member is likely go abroad (East Africa) on a fixed contractual payment in USD for the next 2 years. My Question is more on the likely USD to INR valuation in the next 2 years (2008 – 1 US Dollar was around 40 Indian Rupees, 2009 – crossed 50, 2010 & 2011 – 45 (+) & 2012 (now) – hovering between 54-57). How do you, with your Global Strategic/Financial Overview; see 1 USD to INR over the next 2 years.
Thank
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Dear Deepak,
Giving you an economic point of view, I am of the view that INR will appreciate against USD and we could probably see the levels between 44-45. In short term (3-6 months), it may go higher upto 59-60 levels and a base level of 52. It depends how are you planning to remit the money to INDIA. Is it going to be on monthly basis or is it going to be lumpsum?
If we foresee India and the world to grow, even INR will definitely appreciate against USD. So thats from an economic point of view.
Dear Deepak, You mean to say there ‘ll be fixed salary In USD for that family member?
Now to safe guard the income due to currency fluctuations, this member wants a cut off point to negotiate the income in USD. If the income is not fixed yet & there is still scope to negotiate, I w’d like to base 49-50 level as reference point for converted Indian salary. For example if the USD salary is 2500 USD, @ 50 INR level the converted Indian salary ‘ll be around 1.25L Rs.
Although for the current USD-INR conversion rate of 55 Rs, actual realized Indian salary ‘ll be 1.37L Rs.
Once this USD salary is fixed, there may be following scenarios –
Case 1 –
USD remain in 55-56 band for all these 2Y. A normal converted Indian salary ‘ll be there.
Case 2 – USD goes to 60-61 Rs. Band. A more than normal converted Indian salary ‘ll be there hence with out doing any extra efforts, there ‘ll be higher Indian income.
Case 3 –
USD comes to 49-50 Rs. Level, the converted Indian salary ‘ll be lower than the normal one but it’s near to the level calculated at the time of negotiation.
Case 4 – USD goes to lower levels say 45 Rs., the Indian salary ‘ll be less than the anticipated one & practically the person ‘ll be in loss.
Frankly speaking, no body can predict the level of USD – INR for next 2Y. So we can only plan our moves with a level in our mind where we are comfortable.
Thanks
Ashal