Indian rupee slips against US dollar: Remit when it drops further against UAE dirham?

Dubai: If you’re an Indian expat in the UAE eyeing the exchange rate to send money home, this week has brought both opportunity and confusion.

The Indian rupee has slipped notably against the US dollar — and since the dirham is pegged to the dollar, that’s good news for remitters. But with major central bank decisions looming and markets on edge, should you strike now or wait for a better rate?

Rupee dips as markets turn nervous

On Thursday, the Indian rupee weakened by over 30 paise in early trade, falling to INR85.64 against the dollar — a sharp drop from the previous day’s INR85.32.

Against the UAE dirham, the value of the Indian rupee depreciated by 12 paise to 23.25 in the morning session, from 23.13 yesterday, and expected to drop further by Thursday evening. For UAE-based remitters, this translates to more rupees for every dirham exchanged.

Currency traders say this slide comes as investors turn cautious ahead of a key speech from US Federal Reserve Chair Jerome Powell, which could shape the path of future interest rates in America.

UAE dirham strength remains steady

Since the UAE dirham is pegged to the US dollar, any dollar strength gives remitters here an upper hand. The rupee had shown some early-week strength, even touching INR84.60, but lost momentum quickly — and Thursday’s dip has potentially opened a remittance window.

What's driving the rupee weakness?

Several forces are at play:

· Weak Indian stock markets: The Sensex and Nifty both fell on Wednesday, dragging down rupee sentiment.

· Global uncertainty: Investors are nervous about possible US rate cuts being delayed due to sticky inflation and talk of new tariffs.

· Rising US Treasury yields: The 10-year yield hit a one-month high of 4.55%, making the dollar more attractive to global investors — and putting pressure on emerging market currencies like the rupee.

Good news from India’s inflation data

Back home, India’s inflation is cooling. Wholesale inflation dropped to a 13-month low of 0.85%, while retail inflation softened to 3.16%, the lowest since 2019. This is sparking hopes that the Reserve Bank of India (RBI) may cut rates in June — potentially by 25 basis points.

But here’s the catch: rate cuts can weaken the rupee further by reducing the appeal of Indian assets to foreign investors.

What are experts saying?

Currency strategists believe the rupee may stay under pressure for now, trading between INR85.00 and INR85.75 in the short term. One trader said, “If Powell sounds hawkish tonight, the rupee could face more headwinds.”

At the same time, falling oil prices — Brent crude is down over 2% — and a softer US dollar index offer some cushion to India’s trade balance, which might limit the rupee’s downside.

So, should you remit now?

If you’re watching the exchange rate closely, this week’s rupee dip may offer a short-term opportunity to get more bang for your dirham. But with Powell’s speech and India’s rate decision around the corner, expect volatility.

Bottom line:

If you need to send money soon, it might be smart to lock in current levels before potential policy surprises shift the dial again. But if you're not in a rush and feel lucky, keeping an eye on the ₹85.75 mark could offer even better returns.