Indian rupee falls 47 paise to 69.82 against US dollar in early trade
Right from February 24, which was when the hostilities between Russia and Ukraine started, the Indian rupee had come under severe strain. Image Credit: Pixabay

Dubai: Will the India rupee touch a new low to the dirham today?

Currency movements ahead of the market’s opening suggest the rupee will start close to its all-time low of Rs20.88 to the dirham. Even then, there are already currency tracking websites that show the rupee having gone past that figure to be at Rs20.91-Rs20.93 in pre-market opening trades.

A full picture of the rupee's status will be clear at 8.30am UAE, which is when the currency market opens here.

The earlier low of Rs20.88 was hit on April 20 of 2020, as India faced up to the full impact of what the COVID-19 pandemic would do to its economy.

The Indian rupee had been under constant pressure right from the time the conflict started between Russia and Ukraine on February 24. It had closed on Friday at Rs20.70 levels, and the impression was that it would start this week at 20.80.

“Not just the Indian rupee, every currency is going to have a stormy day today unless something is done to cool it off,” said a currency analyst. “The US talk about curtailing Russian imports of oil is adding to the stress on the markets.”


This is the current dirham-rupee exchange rate early on Monday (March 7)

Remittance surge

Indian rupee remittances from the UAE is going through one of its best phases since the start of the month, with Indian expats using their February salary credits to good use. Whether via currency exchange houses or through account-to-account transfers, March’s rupee remittances has been “at or even better” than previous highs, market sources say.

“Most of the transactions have already taken place at around the Rs20.60 levels,” said one treasury analyst. “Not many were expecting the rupee to slip to Rs20.88 levels this time. If this level sustains through the rest of the day, we can expect another major rupee outflow.”

More power to the dollar
The 'Dollar Index', which weighs the US currency's strength against key global currencies, is currently at 98 after starting the day just over the 99 mark.

"The US dollar is staging an uneven rally today as oil prices explode higher," said Jeffrey Halley, Senior Market Analyst, Asia-Pacific at the consultancy Oanda. "The dollar is rallying versus heavy energy-importing countries, but is retreating or holding steady versus commodity-exporting countries.

"I expect this trend to make itself more pronounced, this week if things stay the same as they are this morning."