Customers form a queue at a money remittance centre in Dubai. Image Credit: Pankaj Sharma, Gulf News

Dubai: Indian expatriates who are holding off remittances could benefit from favourable exchange rates, with analysts forecasting that there will be further declines over the next few weeks or months.

The Asian currency slumped to a lifetime low of 20.08 against the UAE dirham and 73.2 against the US dollar on Tuesday morning on the back of higher crude oil prices.

As of Wednesday, 9:42am, the rupee recovered a bit and was trading at 19.90 and 73.08 versus the UAE and American currency, respectively. However, the  underlying fundamentals indicate that the rupee could drop further to 20.60 or 21 against the dirham in the short term.

Asian currencies have been taking a beating from the US dollar this year, with the rupee registering the biggest decline of 11.7 per cent as of September 4 this year.

Indians are the biggest remitter of funds to their home country and the continued decline could positively impact the pockets of beneficiaries, as it increases the remittance power of US dollar or dirham-earning expats.

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If the rupee hits 21 against the dirham, expats could send 21,000 rupees for every Dh1,000 dirhams, or a a difference of 1,100 rupees at today’s exchange rates.

“There seems to be an onslaught on the Indian rupee from all sides and in the short term, it can reach 20.60 against the UAE dirham,” Yogesh Khairajani, investment research analyst at Century Financial, told Gulf News.

Sudhesh Giriyan, COO of Xpress Money, predicted that the rupee could touch a new historic low anytime within the next several weeks.

“The Indian rupee is on the verge of reaching a new historic low by breaching the 20 mark for a UAE dirham. [It is] likely to fall further and may touch 21 against the UAE dirham by the end of the year,” Giriyan told Gulf News.

Promoth Manghat, executive director and group CEO of Finblr, said the rupee will sink further in the beginning of 2019.

"Looking at the present dynamic conditions, both economic and political, and the forthcoming India elections next year, we expect the rupee to slip further by [the first quarter of] 2019."

Remittances from the UAE to India accounted for the biggest share (39.6 per cent) of money transfers between April and June this year, according to data from the UAE Central Bank.

That’s approximately Dh17.6 billion in forwarded funds in three months. Pakistan received the second-biggest share at 8.5 per cent or an estimated Dh3.8 billion, followed by the Philippines, which bagged 7.1 per cent or Dh3.2 billion.c