Currency risk

Jamie11

Hi All,

Im buying property in India and I am concerned about the currency risk.

Does anybody know how i can manage this? does anyone know if there is a bank or branch outside india where a foriegner can have a rupee account? or alternatively if it is possible for a foreigner to open a bank account in India from abroad.....or any other way i can buy and hold rupees from the Uk?

Thanks
Jamie

Rob_The_Pom

You may be able to do some form of currency hedge, but I suspect you would need to talk to a broker to enact that.
It is certainly possible for institutional investors - the international bond funds run by my previous employer used them to protect against currency risk, but for the private individual I'm not sure.

I think you should go to a broker.
I hope this is of some small help and good luck!

Rob

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Vibhu Jindal

I am not aware of wether the foreigners can hold rupee account or not but if your are buying property in India (assuming paking payment in INR)...then take a Hedge at USD /GBP Leg because to buy INR first u need to convert GBP to USD and then to rupee...in next 6 mnths INR is expected to appreciate against USD so you beter sell USD forward and buy Rupee...

Hence per GBP getting more INR

it all depends on when you are planning to make payments in INR

Stonewaller

I'm live in the U.K. and have property in Goa. If you can prove you own a house in India any of the local banks will allow you to open an account, If you open an internet a/c you can transfer cash from the U.K.

Nick-H

There is no need to convert GBP to USD.

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Nick-H

1. I don't think you can open a rupee account at any bank outside of India. What do you see as the advantage?

2. If you are an NRI you can open a non-resident account in India. If you are a 'foreigner' I think you pretty much have to be resident here to open a bank account here.

You can check out these options on the various web sites of Indian banks eg UTI bank, ICICI bank (they have a London branch), etc etc etc.

You can cross-refer the 'letter of the law' at the Reserve Bank of India site. --- but just because the RBI says you can do something does not mean that you find a willing bank. Another thread refers to people who have tried to open rupee accounts as tourists for the duration of their stay in India. Apparently RBI says you can; apparently the banks say, 'no thanks...'.

Jamie11

Nick,

The reason I was asking about a rupee account was so I can convert sterling to Rupees now. I need to make several payments in rupees over the next year. if I convert to rupees now Im locked in and know my cost. if I dont, i could end up paying a lot more, or a lot less.

Nick-H

Very true. And now would seem like a good time to buy rupees!

But I think I misunderstood your original question: I was thinking you wanted a rupee account outside India.

Kingfisher

I can personally recommend an NRO SAVINGS ACCOUNT with ICICI. Although it might appear from the website that these accounts are meant for NRIs (and the information is found in the NRI section), non-PIO's are eligible. In my own situation, I am retired and spend around 5 months per year in India on a tourist visa. I opened the account in a branch in a town near my Indian residence: it required an opening deposit of IR25,000 and requires a minimum balance of IR10,000 to keep open. I have both a check book, an ATM card, and access to the account through the internet with which I can set up to pay bills and all the usual banking stuff. Transfering funds from Canada is also easy and inexpensive (no fees, and a good exchange rate).

Fund transfer varies by country of residence -- in GB you would have more options than me as there are 5 ICICI branches in Britain and if one is convenient to you it would be possible to have an account in each country and have more-or-less instant access to funds. For me, I can send a mail deposit with a check drawn on my local bank to a Canadian location ('lock-box') and the funds are available within a couple of days for amounts less than CDN8000: for larger deposits a bit more time is required as the amount not credited until the check clears.

Here is the website URL:

http://www.icicibank.com/pfsuser/ici...n/Accounts.htm


They are pretty good about answering specific questions on line but you might prefer visiting a local branch, if one is nearby, to get more personalized information.

goangoangone

Ha ha! All of a sudden there's a plethora of Forex dealers on IM.
If you want to wake up each morning and worry which way the market will move, then open a dealing account. Otherwise open an NRO account, transfer the money in, and continue to enjoy life.

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Vibhu Jindal

unless amount involved is small dont worry about hedging coz it aint gonna cost you a lot by movement of 1 or 2 Rs. per GBP in adverse direction....

but if amount involved is big then you have to worry...the problem with direct conversion acounts is that banks usually eat a lot of commision while converting GBP in INR directly

crvlvr

why don't you ask the seller if you can fix the purchase price in pounds? When its time to make payment, just wire him the funds.