UAE-based Indians rush to send money home as rupee nears record lows

Khaleej Times

a day ago

The Indian rupee has slipped close to record lows against the UAE dirham, presenting a windfall for Indian expatriates in the Emirates who are remitting more to take advantage of favourable exchange rates.
Currency dealers and remittance companies say activity has surged in recent days as the rupee traded around Rs23.91 per dirham, with intra‑week swings between Rs23.63 and Rs23.95 — among the weakest levels in recent years.
The decline has been driven by a mix of global and domestic pressures. Heightened trade tensions between the US and India, including the threat of new tariffs of up to 25per cent on Indian exports, have unsettled markets. Investors have pulled more than $2 billion from Indian equities in July 2025, marking the rupee's worst monthly performance since 2022.
Rising global oil prices have inflated India's import bill, worsening its trade deficit, while the Reserve Bank of India has opted for a measured approach to intervention, allowing the currency to adjust to external shocks.
For Indian workers in the UAE, the rupee's weakness has translated into higher value for every dirham sent home. "The current exchange rate presents a unique opportunity for Indian expatriates in the UAE to maximise the value of their remittances,' said Rashed A. Al Ansari, CEO of Al Ansari Exchange.
'While the rupee's outlook will continue to depend on a mix of global and domestic factors, we are fully prepared to meet increased demand and provide customers with the best possible value and service.'
Al Ansari Exchange has reported a notable increase in remittance transactions since the rupee's slide accelerated.
Customers are remitting higher amounts in rupee terms for the same outlay in dirhams, offering a meaningful boost to families and dependents in India. In anticipation of sustained demand, the company has ensured adequate liquidity across its branch and digital network, introduced special promotions, and increased staffing at high-volume locations.
Analysts said GCC remitters are taking full advantage. Many see this as an opportunity not only to support household expenses but also to contribute to long-term investments in property, education, or business ventures in India.
Currency strategists caution, however, that exchange rates can reverse quickly if global sentiment shifts or if the Reserve Bank steps in more aggressively.
They said in 2025 when India's remittance inflows are expected to remain above $130billion, the rupee's weakness is adding a timely boost for millions of recipients.
For UAE expatriates, the maths is simple: the weaker the rupee, the stronger their remittance impact.
The UAE is one of the world's largest sources of remittances, with India consistently ranking as the top recipient.
According to the World Bank's latest Migration and Development Brief, India solidified its position as the world's leading remittance recipient, with overseas workers sending a record $129.4 billion — a figure boosted by an unprecedented $36 billion in the December quarter alone, per the Reserve Bank of India (RBI).
GCCwide remittance outflows dipped slightly by 0.4 per cent in 2023 to $131.5 billion, reflecting post-pandemic adjustments and policy shifts, such as Saudi Arabia's decision to allow migrant families to relocate, reducing the need for cash transfers home.
Despite this, the UAE stood out, contributing $21.6 billion to India —19.2 per cent of its total inflows —making it the second-largest source globally after the United States. A rupee-dirham payment pact has streamlined transactions, enhancing the UAE's role.
The Reserve Bank of India's data shows that the UAE is among the top three sources of inward remittances to India, alongside the United States and Saudi Arabia.
Inward remittances from the UAE are estimated to have exceeded $20billion in 2024. Supported by a robust labour market for Indian workers and favourable exchange rates in key periods, the remittance trend has continued into 2025.
Industry sources indicate that in the first half of this year, remittance flows from the Gulf — particularly the UAE — have remained strong, underpinned by higher oil prices, stable employment, and steady demand for skilled and semi-skilled labour.
The rupee's latest depreciation is likely to provide an additional lift in the second half of the year, as senders seek to lock in better rates. Currency analysts note that for every dirham remitted now compared with rates earlier this year, recipients in India can get several hundred rupees more on larger transfers.
This has encouraged expatriates to advance planned remittances, pre-pay family obligations, or channel extra funds into investments and savings back home.
The UAE's remittance industry is highly competitive, with dozens of exchange houses and banks offering both physical and digital transfer services.
Digital platforms have grown rapidly, capturing a growing share of transactions with instant transfers and rate alerts.
Al Ansari Exchange, which operates one of the UAE's largest remittance networks, says it has seen a marked increase in digital remittances in particular during the latest rupee slide.
While the weaker rupee benefits expatriates sending money home, it reflects underlying challenges for India's economy. The combination of trade imbalances, foreign capital outflows, and global market volatility continues to pressure the currency.
The RBI faces a balancing act: intervening enough to curb excessive volatility while preserving foreign exchange reserves and allowing the currency to adjust to market conditions.