Indian rupee gains against dirham - have UAE NRIs already gained on fund transfers?

Dubai: As expected, the Indian rupee has firmed up against the dirham, to 23.75 after closing at 23.82 last Friday. But the drop was not as drastic as many FX analysts had been predicting over the weekend after the dollar value dropped late on Friday.

Even then, the rupee should continue to trend higher, and eating into the currency exchange advantage Indian expats in the UAE, Saudi Arabia and other GCC countries have enjoyed on Thursday and Friday last week.

"Most NRIs in the Gulf have already done their fund transfers for August from Friday (August 1)," said a senior official at a leading UAE currency exchange house. "This was done instinctively, because they got one of the best exchange rates so far in 2025.

"The best part is they did so before dollar's fall showed up in the dirham-rupee exchange rate today (August 4)."

What next for the Indian rupee

In the near term, the rupee will likely be '23.7 to 23.9 to the dirham', said Subramanian Sharma of Greenback Advisory Services.

"At this point, the rupee movement is purely driven by geopolitical tensions and statements made by Donald Trump, which is creating confusion. Some stability will come once such statements from Trump stop."

Last week, President Trump said he will impose 25% duties on Indian exports to the US if no trade deal is done.

Indian stock markets are doing fine

The Trump 25% tariff threats don't seem to have spooked Indian investors at the start of the week - the Sensex is up fractionally by 231 points by 10am UAE time.

"So long as Sensex is above 80,400 levels and Nifty above 24,500, the markets are absolutely safe," said Milan Vaishnav, founder of ChartWizard.ae.

"Also, the FIIs (foreign institutional investors) have 91% short positions - the highest since March 2024. This too is likely to lend support in event of any negative reactions by the markets. And, of course, leads to short-covering and lending support to the markets at lower levels." (A short position is where an investor reckons stock prices will drop by a future date. In the meantime, they sell the asset to buy it back at a lower price.)