Indian rupee drops back to under 24 against dirham - but UAE NRIs have already cashed in

Dubai: The Indian rupee seems to have stabilized at under 24 for one dirham early today (September 2), with the country’s central bank likely to have influenced matters by buying dollars in the open market.

As of now, the rupee is trading at 23.99 against the dirham.

Yesterday, the rupee fell to its lowest ever point of 24.04, continuing to test the 24 levels that the currency did for the first time Friday last. This triggered one of the highest remittance volumes of the dirham-rupee as Indian expats in the UAE and other Gulf markets moved fast to make full use of the rates being offered.

Some digital platforms were offering 24.02.

The markets were waiting for the Reserve Bank of India to step in – but not many expected the RBI to do so this fast.

“There were advantages for Indian exporters from the rupee’s drop below 24,” said Neelesh Gopalan, Treasury Manager at a Dubai remittance platform. “It was expected that the RBI would wait longer before it made its move to stabilize the rupee. Yesterday itself, it was clear that the RBI did move in.”  

The rupee’s drop was set off after the US’s 50% tariffs took effect on August 27, which includes the additional 25% imposed because of India’s oil purchases from Russia, which the US opposes. India has categorically said it will not curtail oil shipments from Russia, whatever be the impact on its economic growth from the US tariffs.

Interestingly, the rupee’s slide was happening even though the dollar itself was under pressure. The Dollar Index – which tracks the US currency against a set of major global peers – is at 97.79, well off the pace from recent levels that had seen it touch 99 and over.