Central bank\'s \'mild\' intervention seems to have stalled the decline temporarily, believe traders. Indians expats living in the UAE and elsewhere across the Gulf, and indeed in other foreign lands, are cashing in on a weak rupee by remitting record money home, even if that means borrowing through their skin. The Indian rupee fell to a fresh all-time low of Rs15.374 against the UAE dirham (Rs56.48 against $1) at 8.30am UAE time (4.30am GMT) as lack of good news globally and a constantly deteriorating local economy puts more pressure on the emerging economy’s beleaguered currency. This is being seen by non-resident Indians (NRIs) as an opportune time to remit record sums home, say experts, with local bankers in the UAE acknowledging a surge in personal loan applications from Indians due to the most favourable exchange rates ever. According to a World Bank report on remittances, India is the world’s largest recipient of remittances – or money sent back home by its nationals working in a foreign land – with the country benefiting from a record $64 billion in 2011, a 10 per cent surge over the $58 billion that the country received in 2010. An upward revision to flows to India in 2011 (by $5.8 billion) is primarily due to a weak rupee and robust economic activity in the Gulf Cooperation Council countries, which are major destinations of recent migrants,” the World Bank report said. This year, in 2012, that figure is expected to reach at least $70 billion, believe analysts, with the rupee making successive lifetime lows in the past few months. Anecdotally too, the evidence is stark. Emirates 24/7 visited a couple of foreign exchange remittance houses this morning and witnessed swelling queues, comprising mostly Indian nationals, getting in line to remit money thanks to the better-than-ever exchange rates. Market traders and forex experts believe that rupee could slide further should confidence in the domestic economy deteriorate, or if the global risk environment worsens. Traders said the Reserve Bank of India (RBI), the country’s central bank, intervened though at a smaller scale this morning by selling US dollars to support the battered currency. \"The RBI was seen selling dollars from 56.40 rupee levels. It seemed like mild selling,\" newswire Reuters quoted an unnamed state-run bank dealer as saying. The rupee is now down more than 28 per cent since hitting a 52-week low of Rs11.998 against Dh1 on August 2, 2011. “The Indian rupee continued to weaken against the US dollar last week. The weakness came on the back of the RBI’s decision to keep the interest rates and cash reserve ratio unchanged. A Fitch downgrade of the country’s sovereign outlook also hurt the rupee,” said Subhash Gangadharan, currency analyst with HDFC Securities, in his weekly currency update on Tuesday. With uncertainty looming in the global economic domain, emerging market currencies, especially the Indian rupee, are likely to be hit hard if the inflow of bad news continues unabated. “In case of severe deterioration in the global investor risk appetite, the most likely immediate impact would be a sharp depreciation of the rupee and a steep fall in the equities. Other asset classes would also come under a lot of strain,” said Gangadharan. Adding to the flow of bad news is the shortage of US dollar supply in India, something that can have an immediate impact on the Asian currency. “Dollar shortage in the inter-bank market could become severe as there would be a flight of capital and inter-banking funding markets could freeze for some time, like during the Lehman crisis, the previous most severe market dislocation in 2008. Rupee liquidity would also be squeezed, as the RBI would have to intervene aggressively and sell dollars to stem the pressure on the rupee,” said Gangadharan. “We may re-test recent record lows as soon as by the end of this week, and hence need to watch out for RBI, unless we get some positive moves from the government,” he added. “The economic impact on India of the euro zone troubles would be particularly severe at a time when growth is already slowing. Export demand would shrink as external demand has a close correlation to world trade growth. Global trade contraction is highly likely in the event of synchronised recession in major global economies,” he explained. “Investment cycle in India would be hampered severely and even domestic consumption would be adversely impacted on account of a loss of confidence,” he added.