Dubai: The next few days should see some of the highest remittance levels – in value and volume – for the Indian rupee, as the currency sticks to the over 21 to the dirham levels. On Tuesday (May 31), ahead of the market’s opening, the rupee is 21.13 to the dirham.
On Monday, currency houses in the UAE were recording brisk remittances as expat Indians who had already received their salaries made their monthly remittances. “All through the second-half of May, Indian expats had been hoping that the rupee-dirham would stick to 21+ levels,” said a treasury official at a local exchange house. “They have got their wish.”
This time, there will likely be no doubts about whether it is a good time to send, or whether there should be some holding back if the rupee slipped further.
It was on May 9/10 that the rupee breached the 21 level, but by then, many had already sent in their remittances for the month. This is why over the next few days, there will be a sure – and sizeable – spike in Indian rupee remittances. “Between May 10 and until last week, it was high networth Indian residents in the UAE as well as businesses with India operations who had been the biggest beneficiaries of the drop past 21,” said an FX analyst. “The salaried expats get their turn now.”
No RBI interventions – so far
Over the last 10 days, the actual exchange rate to the dirham has been remarkably consistent at 20.98/20.99 levels. The only time the exchange rate dropped to 21.01 was on May 24.
“Based on what we can see from the markets, there has been no move by the Indian central bank to prop up the rupee by buying dollars,” said the analyst. “The official policy seems to be that 21/Dh (77.50+/$) levels seem to be OK under the current economic situation.”
