Dubai: The Indian and Pakistani rupee has come under fresh pressure with the dollar gaining strength against most major currencies.
The Indian rupee is now at 20.40 to one dirham, and could come further pressure in the next 48 hours. According to currency exchange houses, NRIs are expected to see how the rupee performs today to make up their minds about sending.
“They will want to see if the rupee drops to its lowest point – 20.80 to a dirham – and then commit to sending in their remittances,” said Antony Jos, Executive Director at Joyalukkas Exchange. “Even with liquidity being a problem, those Indian expats who have received their March salaries will try and benefit from the current drop.
“This weekend could be a busy one for remittances from here if the Indian rupee and other key Asian currencies remain under pressure.”
In the currency markets, one dollar now equates to 76.23 Indian rupees. The rupee had been in the 74-75 range in recent days as the Indian Government and Reserve Bank of India used a mix of dollar reserves and reforms to try and firm up the rupee.
It was recently that the rupee had fallen below 76 to the dollar for the first time. At the time it was felt that it could test the 77/78 levels as well, but the government and Reserve Bank of India had been doing quite a bit in the markets to stave that off.
Dollar trumps all
As for the Pakistan rupee, a dollar is now at 165.96, just short of the 168.29 it had dropped to in the last 30 days. In dirham terms, one dirham fetches 45.20 Pakistan rupees.
“Investors are dumping emerging market assets to seek the safety of US Treasuries and assets like gold amid the rapid spread of the coronavirus outside of China,” said Jos. “Selling of the dollar by banks and exporters has helped widen the gap.”