Indians queuing up to send money home.

DOHA • The Indian rupee has been falling over the past two to three days with its exchange rate against the Qatari riyal (QR) yesterday averaging 12.79, the lowest in months.

Indian bankers here attributed the dip to higher oil prices in the international markets. India imports about 82 per cent of its energy needs and this puts immense curb on its financial (and foreign exchange) resources, said a Doha-based banker.

Having recently raised petroleum prices in the domestic market, the Indian government can hardly afford to further hike the rates to foot its ever-fattening oil import bill denominated in the dollar.

The country's current account deficit is rising hugely as a result, putting pressure on the rupee, bankers said.

Recession seems to be slowly catching up the world over due mainly to the higher crude rates, mounting tensions in the Middle East and the fact that the US economy is not doing well. In India, the July 11 Mumbai blasts seem to have aggravated the impact of these factors.

Indian stocks were down yesterday and foreign institutional investors (FIIs) are beating a retreat. Inflation is currently under control being marginally less than five per cent, but if the oil prices keep looking up the way they are, the situation may worsen, warn bankers. "Oil prices are playing havoc with India's resources," one of them commented.

For expatriate Indians in Qatar, a falling rupee is good news since they get better exchange rate for each riyal they save, but the thinking has a basic flaw as a weakening home currency leads to rising costs back home. "There are widespread fears of inflation going up," said another banker.

Bank deposit rates in India-for the rupee, dollar and other key foreign currencies as well-have been constantly going up, in line with the global trend.

The rate for rupee deposits for a year has risen to 6.7 per cent, says Brahma Rao, General Manager of Trust Exchange, which is managed by India's largest bank, the State Bank of India (SBI).

The rate was 6.43 per cent barely a few weeks ago, reminds Rao. According to him, the dollar deposit margin has increased too. From 5.43 per cent for a year's deposit, the rate has now reached 5.7 per cent at home.

The savings bank (SB) deposit rate continues to be 3.5 per cent, a figure that was almost equal to rupee term deposit rates some two years ago.

However, these are not yet the lowest levels the Indian rupee has witnessed in the Qatari foreign exchange market. The exchange rate had reached its nadir around four years ago when a QR was fetching more than Rs13.

Since the QR is pegged to the dollar, each time the rupee takes a beating against the greenback, it loses to the Qatari currency as well.