Remitting to India: Will the Rupee Stay Weak Against the USD and UAE Dirham?
DUBAI: Indian expatriates in the UAE are closely monitoring the performance of the rupee, which recently hit a record low of ₹88.17 against the US dollar and ₹24.05 against the UAE dirham.
This decline has increased the value of remittances, allowing families sending money home to benefit from a stronger payout.
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Several factors are contributing to the rupee’s weakness. A stronger US dollar has exerted downward pressure on many currencies, including the rupee.
Additionally, recent tariff tensions, with the US imposing steep tariffs on Indian goods and penalties on oil trade with Russia, have further impacted investor sentiment.
The Reserve Bank of India (RBI) has intervened by deploying state banks to mitigate the rupee’s decline, but such measures only stabilize volatility without reversing the overall trend.
Finance Minister Nirmala Sitharaman acknowledged the rupee’s challenges but noted that many currencies are facing similar pressures.
In the short term, the rupee is expected to remain weak, benefiting expats who are remitting money now. However, future stability hinges on potential US Federal Reserve rate cuts and a resolution to trade tensions.
As the dirham is pegged to the dollar, fluctuations in the dollar directly affect the AED/INR exchange rate. For now, UAE expats are encouraged to take advantage of the favorable conversion rates before any potential market shifts.
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