Dubai: The Indian rupee is slipping between relative highs and lows ahead of the next central bank meeting Friday (August 4) and a further interest rate hike of between 0.35-0.50 per cent. For Indian expats in the UAE, they should do a bit of wait-and-watch before making up their minds on the next remittance.
The rupee had touch 21.44 to the dirham yesterday at one point before slipping to 21.53, and is now at 21.62. It was just last month that the currency had been at its lowest point ever, 21.79 to the dirham, and with indications that a fall past 22 was eminently possible.
On August 1, the rupee had opened 79.18 against the dollar and closed 79.02.
“The last 48 hours have seen the rupee shift positions, and the latest decline should be seen in the context of the decline for the euro, pound, etc. against the dollar,” said an FX analyst. “Tomorrow’s RBI (Reserve Bank of India) meeting and rate increase should set the tone for the rupee’s short-term prospects. By and large, the central bank seems to have accepted that 79/$ or 21 (or over 21/Dh) is an acceptable level.”
The RBI has since April hiked interest rates by 1.30 per cent, and on both occasions, the rupee had gone through a bit of a wobble. Aug 1(open 79.18 close 79.02)
Remittance options
Remittance levels had dropped once the rupee’s firming up became noticeable, but industry sources are hopeful that with the renewed drop, things would soon get back to normal. “Indian expats are comfortable with levels above 21 – but Tuesday’s strengthening was sharp and that led to the reluctance,” said a spokesperson with LuLu Exchange. “At 21.50 plus levels, the market can expect some pick up on remittances, especially those linked to salary crediting.”
