Indian expatriates in the United Arab Emirates woke up on Wednesday to a significant shift in currency markets as the Indian rupee weakened to its lowest level ever against the UAE dirham. The exchange rate temporarily stepped over the psychological 25 mark falling at approximately 25.05 dirham per 1 rupee compared to approximately 24.85 a day before. This sudden surge of action has provided a favourable channel of remittances with UAE based Indians being able to send more rupees back home with a similar amount of the dirhams. To illustrate, a transfer of Dh1,000 today would translate to about 25, 040 which is significantly higher than what it would have earned a few weeks back.
AED To INR: Indian Rupees Falling To 25
According to the currency traders, the recent fall of rupee is an extension of an ongoing weakening process that has been cumulative over the last one month. The exchange rate moved slowly upwards during the month following an initial level of 24.49 to 24.54 per dirham in early February. By mid February, it had risen to about ₹24.57-24.61, which indicated an increasing pressure on the Indian currency. The last weeks of February were characterized by the increase of the rate to the level of approximately 24.66, and then, on the first day of March, the figure reached approximately 24.71, and on the second day, it reached approximately 24.82. The move of over 25 on Wednesday was the best intraweekly performance, leaving the rupee in the record frontier against the dirham.
AED To INR Rate Skyrockets — Indian Rupee Falls To 25, Why Expats Are Watching The Fall Closely
The analysts are citing the increasing crude oil prices as one of the leading reasons that contributed to rupee depreciation. The recent rise in the price of crude brought it to an unprecedented high of more than 82 per barrel, after increasing approximately 12% within two days, the largest in the short run since 2020. The country relies on imported oil, thus, when the price of crude oil is high, it puts strain on the balance of trade and the currency of India. The rupee had also gone weak to the US dollar and momentarily hit the 91.73 mark to the dollar. To the number of Indian expatriates in UAE, who remit money back home to sustain their families or to settle loans, the weaker rupee implies that remittances are currently providing more value in India.
