Weak U.S. dollar makes life tougher for immigrants

By Kevin Plumberg

NEW YORK (Reuters) - At the Desi Deli on the West Side of New York, 42-year-old Kamal Jit serves up curries and money transfers for his most loyal customers -- immigrant taxi drivers from northern India -- and business has been good.

But the persistently weakening U.S. dollar and the strengthening Indian rupee has meant that immigrants here have to actually dig deeper into their thin wallets to send home the same amount every month.

"To keep the amount in rupees the same, people definitely pay more," said Jit, the owner of the deli who himself arrived in New York 12 years ago.

The falling dollar, having just finished its sixth year of a long-term decline, has eroded the value of the billions sent overseas every year by immigrants working in the United States.

Last year U.S. immigrant workers sent home about $42.8 billion of what economists call remittances, the most from any country, according to the World Bank.

But the dollar's steady decline is complicating things. To mitigate the effects of exchange rates, immigrant workers are already working longer hours, keeping costs down, and in some cases moving to Europe, where the euro is stronger.

Some fear a nationwide housing slump in the United States will further slow growth and push the dollar to new lows, making it even harder for U.S.-based workers to continue extending their lifeline to family members abroad.

"In terms of remittances, the fall in the dollar has hurt some of the world's poorest the most because it affects the value of the money that migrant workers send back home to their families," said Dilip Ratha, senior economist at the World Bank in Washington.