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Remit? Indian, Pakistani rupee to steady, Philippine peso to be up this month

Pakistan rupee to hover at 77, India rupee at 22.7 vs. UAE dirham in December



Al Ansari money exchange, Dubai. Picture used for illustrative purposes.
Image Credit: Photo Virendra Saklani/Gulf News

Dubai: Remittances from the UAE were seeing an uptick as several, particularly South Asian currencies, lost a bit of momentum and recorded remittance-beneficial rates in the past few weeks. But will the currency trend continue in the coming month?

While the Indian rupee and the Pakistani rupee are expected to stay steady against the UAE dirham, the Philippine peso is seen strengthening in the weeks to come. Here’s how you can take advantage of these remittance-beneficial rates and when.

Will your currency back home rise or fall in December?

When it comes to sending money back home, it is vital to know whether it is currently an ideal time to remit. To understand whether it is or isn’t, one should first find out if your currency back home is expected to rise or fall in the days to come. Check live forex rates here (hyperlink).

Here is an analysis of how the aforementioned currencies have been performing and expected to perform in the coming weeks and month, to help understand whether remitting money now is profitable or cost-effective, or should you wait it out for a few weeks for a better rate to come along.

Pakistani rupee to edge up before steadying, remit now

According to research, the Pakistani rupee value is expected to rise the most in value to 76.25 by the end of December against the UAE dirham, from the current levels.
Image Credit: Reuters
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The exchange rate of the Pakistan rupee was at 284.2 against the US dollar (77.39 versus UAE dirham), and is expected to strengthen slightly as soon as next week, so while it may profit to remit this week, as rates are largely at current levels in December, it wouldn’t make much difference.

According to research, the Pakistani rupee value is expected to rise the most in value to 76.25 by the end of December against the UAE dirham, from the current levels. However, the currency’s value is expected to bounce back to current levels.

The Pakistani rupee has been falling against the US dollar and the UAE dirham in the interbank currency market for the past 12 months. Since the start of 2023, the value of the currency has weakened by over 25 per cent. However, exchange rates are sharply reversing these past weeks.

Philippine peso value seen rising, don’t delay remittance

A weaker peso would mean that you will get comparatively more pesos for your UAE dirham’s worth back home.
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The peso was currently at 15.08 to the UAE dirham and at 55.36 against the US dollar. The rates are expected to rise in value in December, hitting its highest value point of 14.65 before the end of the month, and remain unchanged in the months after, according to research.

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While a weaker peso would mean a better exchange rate for overseas Filipino workers (OFWs) who send money home in US dollars, or a currency pegged to the greenback, a weaker peso would also mean that you will get comparatively more pesos for your UAE dirham’s worth back home.

As the value of the Philippine peso is expected to rise in value against the UAE dirham over the next 30 days, such cost-effective rates make it cost-effective to remit now as rates are expected to rebound back soon after.

The average exchange rate of the Philippine peso against the UAE dirham in the first half of the year was largely around 15, so it would be just as cost effective to send money in the coming months , given that the value of the currency is expected to stay the same in the near term.

Indian rupee value to end 2023 on a high, remit anytime

According to new research, the Indian rupee is expected to stay steady against the UAE dirham throughout this month.
Image Credit: Bloomberg

While the Indian rupee was currently at 22.70 to the UAE dirham, the currency was at 83.35 against the US dollar. The Indian rupee fell to record low levels against the US dollar in 2022 but the currency briefly gained strength during the first half of this year before slipping again.

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According to new research, the Indian rupee is expected to stay steady against the UAE dirham throughout this month, before it ends the month at Dh22.70 – which is the same level the currency is at currently.

As the exchange rate of Indian rupee will stay same for expat remitters in the months after, it is financially prudent to remit anytime between now and January. But you’ll get more Indian rupees for your UAE dirham’s worth when it is expected to fall in value post January, 2024.

While the Indian rupee has been choppy against the US dollar and the UAE dirham in the recent past, the volatility has decreased in the last six months. However, as per new forecast estimates, flux is again expected to affect the currency’s exchange rates at the start of 2024.

What are the factors triggering these currency movements?
The value of a country's currency is linked with its economic conditions and policies, and generally depends on factors that affect the economy.

These include factors such as imports and exports, inflation, employment, interest rates, growth rate, trade deficit, performance of equity markets, foreign exchange reserves, and macroeconomic policies, inflow of investments, banking capital, commodity prices and geopolitical conditions.

A possible decline against the dirham is a reflection of the decline of the currencies' fall against the US dollar on which the UAE currency is pegged. However, if the US dollar weakens, the trends will reverse.

In other words, any weakness or strength in the value of your currency in your home country 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.

Bottom line? Even though remittance rates seem largely unfavorable now, there is still hope for remitters. The value of South Asian currencies will be pressured to experience losses in the months ahead with the US dollar expected to rise further over the next six to 12 months. This implies more money back home when you are remitting UAE dirhams.

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