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 Pakistani 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 February?
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 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 to rise vs. UAE dirham, remit now
The exchange rate of the Pakistan rupee was at 279.85 against the US dollar (76.20 versus UAE dirham) and is expected to strengthen considerably in a month’s time, so it will profit you to remit soon, as forex rates will stay largely unchanged in the next few weeks.
According to research, the Pakistani rupee value is expected to rise the most in value to 75.40 towards the end of February against the UAE dirham, from the levels seen currently. Also, the currency’s value is expected to get even stronger in the month of March.
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 20 per cent. However, exchange rates are sharply reversing since September.
Philippine peso value to steady for now, remit soon
The peso was at 15.21 to the UAE dirham and at 55.86 against the US dollar, and these rates are seen largely unchanged over the next four weeks. It’s seen briefly hitting a low value point of 15.35 before February-end, according to research, which isn’t much different from the current levels.
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.
As the value of the Philippine peso is expected to steady in value against the UAE dirham over the next 30 days, such rates make it cost-effective to remit anytime between now and the end of February, whenever it better suits you.
The average exchange rate of the Philippine peso against the UAE dirham at the start of 2023 was largely around 15, so it would be just as cost effective to send money in the coming weeks, given that the value of the currency is expected to stay the same in the near term.
Indian rupee value to hold till May, remit anytime
While the Indian rupee was currently at 22.63 to the UAE dirham, the currency was at 83.13 against the US dollar. The Indian rupee fell to record low levels against the US dollar in 2022 but the currency regained its strength over the course of last year.
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 Dh22.62 – which is the same level the currency is at currently.
As the exchange rate of Indian rupee will also stay same for expat remitters in the months after, it is financially prudent to remit anytime between now and May. But you’ll get more Indian rupees for your UAE dirham’s worth when it is expected to fall in value in the months after.
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 past year. However, as per new forecast estimates, flux is again expected to affect the currency’s exchange rates by the middle of 2024.
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 reflects 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? Remittance rates may seem largely unfavourable to remitters now as the value of most South Asian currencies are experiencing gains. But with the US dollar expected to weaken further over the next six to 12 months, you can soon send more money home when remitting UAE dirhams.