Indian expats in UAE: Time to remit? Rupee to stay weak for now, so make most of the rate before it rises
Better future prospects: Banking majors BofA Securities, Citi now point to rupee rising
Dubai: When it comes to sending money back home, it is vital to know whether it is currently an ideal time to remit. So if you were wondering whether or not you should send Indian rupee back home now or wait a bit, here's what analysts are saying.
Against the UAE dirham, the Indian rupee is expected to drop to 22.9 in the coming weeks, before rising further later, so remit soon to take advantage of rates. The currency was currently at 22.5. Check the latest forex rates here.
Rupee to drop further?
Against the US dollar, the Indian rupee was at 82.81. It is expected to trade at 83.48 by the end of this quarter, according to Trading Economics' analysts expectations.The analysts estimate it to trade at 85.70 in 12 months time.
Any weakness or strength in the Indian currency's value against the US dollar will be automatically reflected in its exchange rate with the UAE dirham as the UAE currency is pegged to the dollar.
However, Bofa Securities Inc. is predicting more gains for the Indian rupee, joining investment banking major Citigroup Inc.
"The recent correction in rupee valuation and near-term improvement in current-account and capital flows tilt the risk-reward in favor of rupee appreciation," Abhay Gupta, a strategist at BofA Securities, the investment banking arm of of Bank of America, wrote in a note.
Worst performer in 2022
The currency was the worst performer among emerging Asian peers last year, weighed by concerns over a wider current-account deficit and a stronger dollar spurred by rate hikes by the US. The outlook is now changing after a surprise drop in India's trade deficit prompted economists to cut their forecasts for the shortfall.
The rupee is up 0.1 per cent against the dollar this year and is in the lower pack among Asian currencies, while its high-yielding counterpart, the Indonesian rupiah is up 2.6 per cent. It is closing in on its record low of 83.2912 to a dollar seen in October.
Citigroup Inc. last week said it expects seasonal outperformance and the rupee's nominal effective exchange-rate to strengthen into the end of its fiscal year, it said in a note.
"RBI's reserves have recovered, the real effective exchange rate (REER) index declined and Indian rupee volatility is lower," Gupta further noted.
- with inputs from Bloomberg