Dubai: The dirham to Indian rupee rate has dropped to a low point – of 20.20 for one dirham, setting off a rush among expat Indians to send out remittances. The rupee softness could continue over the weekend and even extend into next week.
“Thursday’s selling rate for the rupee was 20.10 to the dirham and which has now come to 20.20 on Friday,” said Antony Jos, Executive Director at Joyalukkas Exchange. “It’s quite a drop from the Dh19.96 levels that was there before the US Federal Reserve move to raise base rates.”
It was in June of 2020 that the rupee slipped to its lowest point - 20.75 for a dirham.
The rush to remit by NRIs here is quite a departure from the extremely low volumes seen in recent weeks. Remittances to India dropped drastically during the second lockdown phase to control the COVID-19 spread. “Even the start of summer, which is usually a good time, for outward remittances, didn’t pick up until Thursday noon,” said Jos.
“The way these Fed-created currency drops happen, its effect lasts about a week or so and then they stabilise.”
In comparison, the Pakistan exchange rate has been more or less stable over the last 48 hours, and is at 42.63 to the dirham.
On Wednesday, the US Federal reserve raised base rates, signalling a gradual return to more normalcy on their monetary policies. It immediately set off a dollar spike, and also saw gold prices slip dramatically on Thursday.