Non Resident Indians (NRIs) eagerly track currency movements in India to repatriate money back home. This is especially true for millions of Indians working, particularly in the Gulf.
Many NRIs tend to hold onto repatriating money and when they get better rates against currencies they tend to repatriate money back home.
If the dollar rises against the Indian rupee in India, NRIs get a better rate to send money home. So, let's first see if the rupee could breach the 64 levels against the dollar, which could give NRIs better rates to send money to India.
A few factors need to be considered. One is that the recent fall in the rupee to a new 2015 low of 63.77 is on account of persistent dollar demand from Foreign Portfolio Investors who are selling Indian shares. Their demand for the dollar is pushing the rupee lower against the dollar.
There has also been a sudden rise in crude prices from $60 a barrel to $70 a barrel. This means imports of crude oil could get expensive pushing demand for dollars higher. This tends to have a sentimental impact on forex markets immediately. This is one more reason the rupee is falling against the dollar.
The third is that there is no intervention by the Reserve bank of India (RBI). The RBI tends to sell dollars when the rupee is falling, but the RBI might be comfortable with the rupee at the current levels to help boost exports.
If we see global sentiments taking a turn for the worst, in the form of a debt default by Greece, there could be heavy selling by foreign funds in the Indian stock markets. This could lead to fresh dollar outflows. This could also happen if the US Federal Reserve increases interest rates in the US in its policy meeting next month.
All in all, if you are an NRI you may get a chance to repatriate money at better rates, as it is just a matter of time before the rupee breaches the 64 levels against the dollar. Significant depreciation beyond the 64 levels is ruled out.