Indian rupee
For Indian expats, any time in the present is good for remittances with the rupee sticking to 21.25 plus levels against the dirham. Image Credit: Shutterstock

Dubai: The turmoil never happened in the global currency markets the day after. Sure, the dollar’s gained through the day, but the Indian rupee stuck to the range that was there before the Fed raised interest rates by another 0.75 per cent on Wednesday.

“The rupee will remain soft, but the chances of its dropping down to 22 against the dirham immediately are marginal,” said K.V. Shamsudheen, Director at Burjeel Geojit Securities. On Thursday (June 16), the rupee kept at the 21.25 levels after having tested 21.30 earlier in the week.

For Indian expats mulling their next remittances, nothing much has changed. The rupee remains stuck to above 21 to the dirham despite having endured two back-to-back hikes in the last seven days – the first by the Reserve Bank of India and then the US Fed.


“The Fed hike by 75 bps was as per market expectations,” said a Senior Treasury Analyst with LuLu Exchange. “Hence the markets responded positively. Had it been a 1 per cent hike, the markets would have behaved in a bit more unpredictable manner.

“This impact though is a momentary one and the real worry is remains the mounting inflation, geopolitical tensions, and supply chain disruptions. Unless these issues are addressed, all bounce back measures will not necessarily yield expected results.

“As far as the Rupee is concerned, we expect it to test 78.45-78.50 against the USD in the coming days.” (On Thursday, the rupee-dollar is at 78.06.

Pakistan rupee feels the heat at 57/Dh
If the Pakistan rupee was expecting a sense of calm to prevail, it didn’t pan out that way at all. The PKR has been trading at 57.16 to the dirham through the better part of the day.

“The rupee is feeling the heat because there is still no clarity from the IMF on whether it is going to release the additional $3 billion tranche,” said an FX analyst. “The federal budget has come and gone, fuel prices keep increasing, so have diesel prices. Other subsidies will be removed shortly.

“So, the ball is in the IMF’s court to decide what to do next. Because every other transaction Pakistan is expecting derives directly from that.”

Pound and euro slip

There were declines for the pound and the euro, and should continue in this trajectory with the Fed confirming another rate hike – even by another 0.75 per cent – at its July meeting.

On Thursday, the pound-dollar equation was at 1:1.21, a marginal improvement from 1:1.20 on June 14, which was the lowest point for the pound this year. The average in the year-to-date is $1.308 for every pound.


The euro-dollar is 1:1.037, while the lowest point for the euros so far this year was the dollar at 1.04 on May 12. The average so far this year was $1.099 to the euro.

“Soaring energy prices, robust labour demand, cost of living increases, and a central bank that raised the white flag on imported inflation some time ago, have torpedoed the British pound,” wrote Jeffrey Halley, Senior Market Analyst at Oanda. “A potential trade conflict with the EU over the unilateral rewriting of the Northern Ireland Protocol is another headwind the BOE doesn’t need, given the already poor growth outlook.”