01-05-2025
Rupee: Should UAE's Indian expats delay sending money home?
Dubai: The Indian rupee has firmed up to its highest point this year, which will mean NRIs in the UAE and other Gulf states will be getting less out of their monthly funds they send home. The rupee is currently at 22.89 for a dirham, easily clearing the earlier high this year of 23.14.
The last time the rupee was below 23 was on November 28, 2024.
There had been signs of the INR gaining strength in recent days, even against the backdrop of heightened tensions following the Pahalgam attacks last week. According to remittance industry sources, it would make sense for expat Indians in the UAE to remit only what needs to be sent right now at the start of the month and see how the INR fares in the coming days. (The Indian markets are closed today.)
'The current sub-23 levels are the lowest compared to the start of a month so far in 2025,' said Neelesh Gopalan, Senior FX analyst at a Dubai based fintech.
'So, you have 23.31 on January 1, 23.58 on February 1, 23.81 on March 1 and the Dh23.31 on April 1.
'But it's still too early to say whether the sub-23 levels will continue – Indian expats will have to wait and watch.'
A lot of the INR's strengthening has to do with the continued dollar weakness, with the $ index at 99.79. So far, there is nothing in the markets to show whether the dollar is up for a gain and head back into 100 plus territory. (The dollar index compares the relative strength or weakness of the dollar against a set of other currencies.)
At current levels, India's FX reserve levels are just over $686 million, which means sufficient depth to take any short-term crisis if the current tensions spill over.
