Against the UAE dirham, the Indian rupee is expected to rise to 21.8 in the coming weeks, while the Philippine peso is expected to appreciate in value to 14.4. Also, the Pakistani rupee is set to slip to 81.3 by the end of February, 2023. Here's how you can take advantage of these upcoming rates.
Dubai: Remittances from the UAE were seeing an uptick as several, particularly South Asian currencies, lost a bit of momentum and recorded remittance-beneficial rates in the past few weeks. But will the currency trend continue?
Not for all currencies. The Indian rupee and the Philippine peso are expected to rise in the coming weeks, while the Pakistani rupee is expected to drop in value. Here’s how you can take advantage of these remittance-beneficial rates and when. Check the latest forex rates here.
Will currency back home rise or fall?
When it comes to sending money back home, it is vital to know whether it is currently an ideal time to remit. To understand whether it is or isn’t, one should first find out if your currency back home is expected to rise or fall in the days to come.
Here is an analysis of how the aforementioned currencies have been performing and expected to perform in the coming week, to help understand whether remitting money now is profitable or cost-effective, or should you wait it out for a few weeks for a better rate to come along.
If a currency is expected to weaken or depreciate, like the above-mentioned currencies in this instance, it's prudent to take advantage of more remittance-friendly rates after it drops further, rather than now. On the other hand, when it comes to currencies that are expected to appreciate in values, it would be cost-effective to remit now, as the rates would only rise over the near term.
Indian rupee to drop by Feb-mid before rising
Against the UAE dirham, the Indian rupee is expected to drop to 22.28 in the coming weeks, before ending the month much higher, so remit soon to take advantage of rates.
The rupee finished last week higher at 81.51 per US dollar. Traders expect the currency to move in the 82.0-82.5 range for the week.
Any weakness or strength in the Indian currency's value against the US dollar will be automatically reflected in its exchange rate with the UAE dirham as the UAE currency is pegged to the dollar.
The Indian rupee is expected to stay lower against the US dollar, UAE dirham with investors keeping a close eye on equity markets while they awaited the domestic Union budget and the US Federal Reserve meeting.
The rupee fell to 81.67 per dollar on Tuesday, compared to its previous close of 81.4950. The currency is headed for a monthly gain of about 1.3 per cent, relatively less than its peers.
The budget - where the focus will be on the government's fiscal consolidation path - and the Fed meeting are both due on Wednesday and would likely be key triggers.
Ahead of that, India's annual pre-budget economic survey is due later in the day, in which the government is likely to peg GDP growth at 6-6.8 per cent for 2023-24, the slowest in three years, Reuters reported.
While a 25-basis-point hike is widely expected from the Fed, a key marker would be how the officials respond to markets pricing in rate cuts later this year.
Pakistani rupee to drop more, hold on remittance
In Pakistan, the buying rate of the US dollar was currently 261.17 Pakistani rupee (71.11 versus UAE dirham).
According to research, the Pakistani rupee value is expected to drop the most in value to 81.38 by the end of next month against the UAE dirham. So hold off on remitting till then.
The exchange rate of the Pakistani rupee depreciated by Rs6.03 against the US dollar in the interbank trading on Monday and closed at Rs269.63 against the previous day's closing of Rs262.60.
According to the Forex Association of Pakistan (FAP), the buying and selling rates of dollar in the open market were recorded at Rs268 and Rs270.5 respectively.
However, Pakistan's rupee on Tuesday advanced from a record low as the International Monetary Fund team is set to start negotiations over the resumption of its $6.5 billion bailout.
The rupee climbed 1.7 per cent to 265 per dollar on Tuesday, after sliding to an unprecedented 270 on Monday, according to the foreign-exchange desk at Arif Habib Ltd.
Philippine peso value to rise more soon, remit now
According to research, the value of the Philippine peso is expected to rise to 14.43 against the UAE dirham in the coming weeks - making it more cost-effective to send money now. Against the UAE dirham, the peso was currently at 14.91.
The peso slid more than 12 per cent last year against the dollar, but has surged about 6 per cent in the previous quarter. When looking at 2023 as a whole, analysts evaluate how the bulk of its rally may already be over.
The currency appreciated to 54.77 per US dollar on Tuesday, the strongest level since August. The Philippine peso is keeping those gains after data showed faster-than-forecast economic growth, while other Asian currencies also rose slightly against a weaker greenback.
The Philippine economy grew at a stronger-than-forecast annual rate of 7.2 per cent in the fourth quarter due to pent-up demand following the lifting of COVID-19 restrictions.
"The above-consensus GDP growth in 2022 should give the Bangko Sentral ng Pilipinas (BSP) space to tighten policy further in the first half of 2023," said Nicholas Mapa, a senior economist with ING.
- with inputs from Agencies