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 in the coming month?
While the Indian rupee and the Philippine peso are expected to stay steady against the UAE dirham, the Pakistan rupee is seen strengthening in the weeks to come. Here’s how you can take advantage of these remittance-beneficial rates and when.
Will your currency back home rise or fall in October?
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. Check live forex rates here.
Here is an analysis of how the aforementioned currencies have been performing and expected to perform in the coming weeks and month, 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.
Pakistani rupee value to strengthen, remit now
The exchange rate of the Pakistan rupee was at 290 against the US dollar (78.96 versus UAE dirham), and is expected to strengthen as early as next week, so it would be profitable to remit within this coming week, as rates are seen rising further before the end of October.
According to research, the Pakistani rupee value is expected to rise the most to 73.34 by the end of October against the UAE dirham, from the current levels. The currency’s value is expected to hover at far stronger levels till the end of the year.
The Pakistani rupee has been falling against the US dollar and the UAE dirham in the interbank currency market for the past 12 months. Since the start of 2023, the value of the currency has weakened by over 25 per cent. However, a sharp reversal in foreign exchange rates looms now.
Philippine peso to stay unchanged, remit soon
According to research, the value of the Philippine peso is expected to stay largely unchanged at around 15.45 against the UAE dirham over the next 30 days – making it cost-effective to remit now as rates are expected to stay the same in the coming months as well.
While a weaker peso would mean a better exchange rate for overseas Filipino workers (OFWs) who send money home in US dollars, or a currency pegged to the greenback, a weaker peso would also mean that you will get comparatively more pesos for your UAE dirham’s worth back home.
The peso was currently at 15.46 to the UAE dirham and at 56.78 against the US dollar. The rates are expected to stay steady in October, hitting its highest value point of 15.32 as soon as next week, and remain unchanged in the months after.
The average exchange rate of the Philippine peso against the UAE dirham in the first half of the year was largely around 15, so it would be just as cost effective to send money now as opposed to next month, given that the value of the currency is expected to stay the same in the near term.
Indian rupee value to steady in October
While the Indian rupee was currently at 22.64 to the UAE dirham, the currency was at 83.15 against the US dollar. The Indian rupee fell to record low levels against the US dollar in 2022 but the currency briefly gained strength during the first half of this year before slipping again.
According to new research, the Indian rupee is expected to stay steady against the UAE dirham throughout this month, before it ends the month at Dh22.72– which is more or less the same level the currency is at currently. But the rates can drop to 22.9 against the UAE dirham by December.
So the exchange rates of Indian rupee will turn favourable for expat remitters in the months after. So it is financially prudent to postpone your remittance plans to either November or December, when you will get more Indian rupees for your UAE dirham’s worth compared to now.
While the Indian rupee has been choppy against the US dollar and the UAE dirham in the recent past, the volatility has decreased in the last six months. However, as per new forecast estimates, flux is again expected to affect the currency’s exchange rates in the coming months.
These include factors such as imports and exports, inflation, employment, interest rates, growth rate, trade deficit, performance of equity markets, foreign exchange reserves, and macroeconomic policies, inflow of investments, banking capital, commodity prices and geopolitical conditions.
A possible decline against the dirham is a reflection of the decline of the currencies' fall against the US dollar on which the UAE currency is pegged. However, if the US dollar weakens, the trends will reverse.
In other words, any weakness or strength in the value of your currency in your home country 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.
Bottom line? Even though remittance rates seem unfavourable now, there is still hope for remitters. The value of South Asian currencies will be pressured to experience losses in the months ahead with the US dollar expected to rise further over the next six to 12 months. This implies more money back home when you are remitting UAE dirhams.