Time to remit: Indian rupee plunges against the UAE dirham as Ukraine crisis worsens, to weaken further
Rupee tanks 53 paise to 75.07 per dollar, weakens 44 paise to 20.62 from Wednesday vs. Dh1
Dubai: The value of the Indian rupee plunged against the UAE dirham on Wednesday, after touching Rs20.62 against Dh1, the most remittance-beneficial exchange value seen so far this year.
This makes the current rate most suitable for Indian expats in the UAE to get more home currency for their hard-earned dirhams. The Indian rupee dropped to as much as Rs20.62 on Thursday, 44 paise weaker from Wednesday's closing of Rs20.18.
The highest AED-INR exchange rate this year was Rs20.62 on February 14, the same level it is at currently. In mid-December last year, the rupee had dropped to Rs20.73 to the dirham, and the lowest ever point has been the Rs20.88 in late April of 2020. Check the latest forex rates here.
The rupee plunged against the US dollar on Thursday, weakening as Russia’s announcement of a military operation in Ukraine sent Brent crude oil prices surging past the $100 mark for the first time in seven years.
Other currencies hit as well
The rupee opened at 75.02 against the US dollar, then slipped further to 75.16, registering a decline of 55 paise from the last close. Global oil benchmark Brent crude futures jumped 4.67 per cent to $101.36 per barrel.
The US dollar's strength and rocketing oil prices also hurt other peer emerging market currencies, with the commodity-linked Indian rupee leading declines. Philippines peso fell 0.6 per cent, while the Thai baht was down 0.5 per cent.
Weakness in the rupee'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.
The conflict in Ukraine helped drive safe-haven bids for the greenback, while gold prices rose by over 2 per cent.
Dubai and India-based forex analysts opine how the escalation is likely to send inflation higher in the coming months by pushing up commodity prices, while adding the current risk sentiment surrounding currencies in developing countries will outweigh any positive commodity price impact.
Should I remit now or wait?
UAE expats are getting ready to remit after the value of their respective home currencies dropped hard on Thursday. This was about 10 days after the currency hit its lowest value against the UAE dirham this year.
Analysts currently forecast that the rupee will keep declining in the days to come - with more losses expected as the Ukraine crisis escalates further, with some estimates suggesting that the rupee will touch Rs21 against the UAE dirham. Such a remittance-beneficial rate will be received well by expatriates in the UAE.
Last week, rupee was weighed down against the US dollar following a rise in tensions between Russia and Ukraine. However, as the week came to an end, tensions between the two nations started to recede and the rupee appreciated sharply.