Rupee gains, peso weakens, should expats send money home now?

Dubai: Continued declines in Asian currencies are helping UAE expats make their money go further on remittances. The Philippine peso and Pakistani rupee are all lingering near lows not seen in years. The Indian rupee however has got a boost this Monday as the RBI has decided to intervene.

The rupee’s move against the dirham is really a dollar story. The dirham is pegged to the US dollar, so any rupee gain or loss against the dollar carries straight through to the AED-INR rate.

On Saturday, October 10, the RBI announced a package of measures to support the rupee, which was trading close to its all-time low. These include an oil dollar window for Oil marketing companies. Now the RBI sell will sell dollars through designated banks to cover the entire daily requirement of Indian Oil, HPCL and BPCL, until further notice. State refiners are among the biggest daily dollar buyers in India, so this removes a major source of demand from the open market.

Secondly, the central bank has introduced curbs on derivative contracts. Now the limit for taking forex derivative positions without an underlying exposure drops to $5 million from $100 million.

The rupee has lost about 6 per cent since the West Asia conflict began in late February, and more than 8 per cent over the past year. Currently the Indian rupee is trading at Dh26.06 versus the Dh26.28 it closed at in the previous session.

Peso remains unchanged.

The Philippine peso (PHP) is back above the Dh17 mark coming in at DH17.02 unchanged from its previous close. Changes in oil prices impact the local currency because the Philippines imports most of its oil. Expectations that the US Federal Reserve may keep rates high have strengthened the US dollar.

For now, favourable rates are prompting households to reassess strategy, deciding whether to lock in current levels or wait for another shift in the market. (Check live forex rates here)

Current exchange rates as of 08:00 am on October 12:

• Indian rupee: 26.06, slightly stronger from yesterday's levels.

• Pakistani rupee: 75.6, unchanged from yesterday's levels.

• Philippine peso: 17.02, slightly stronger from yesterday's levels.