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?
While the Indian rupee is expected to stay against the UAE dirham, Philippine peso is seen weakening further in the weeks to come. On the other hand, Pakistani rupee is seen strengthening by mid-June. Here’s how you can take advantage of these remittance-beneficial rates and when.
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. 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.
Indian rupee value to stay weak for now, remit soon
With the Indian rupee currently at 20.31 to the UAE dirham, the currency was at 82.09 against the US dollar. The Indian rupee fell to record low levels against the US dollar in 2022 but the currency briefly gained strength at the start of this year before slipping again.
According to new research, the Indian rupee is expected to stay pressured against the UAE dirham until the middle of next month when it will slip to Dh20.36, before it ends the month at Dh20.31 – which is roughly around the same levels of weakness the currency is at currently.
So it is financially prudent to remit any time between now and until the middle of next month, as you will get comparatively lesser Indian rupees for your UAE dirham’s worth by June-end.
These month-end rates are expected to steadily rise from mid-June to the end of the month, ahead of rising further in July, current estimates revealed.
It is known that the Indian rupee has been choppy against the US dollar in the recent past. However, the volatility has been decreased in the last six months on the overall.
Pakistani rupee value to rise by mid-June before dropping
In Pakistan, the buying rate of the US dollar was currently 296.13 Pakistani rupee (80.64 versus UAE dirham). As the Pakistani rupee is expected to rise by the middle of next month, it would be financially prudent to either remit now, or wait until it drops next in July.
According to research, the Pakistani rupee value is expected to rise the most to 78.93 by mid-June against the UAE dirham, from the current levels, before dropping again. The currency’s value will slip slightly by the end of June and is seen dropping further by the start of July.
The currency’s value is expected to hover at weaker levels of 80.96 over the next two months, before the value of the Pakistani rupee plunges even further in the months after.
The Pakistani rupee has been falling against the US dollar in the interbank currency market for months, despite central bank restrictions on imports and its purchase of greenbacks on the open market. Since the start of 2023, the rupee feel 30.7 per cent.
Where is the Philippine peso headed in the weeks to come?
According to research, the value of the Philippine peso is expected to weaken to 15.5 against the UAE dirham over the next 30 days – making it ideal to send money by the end of next month.
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.
With the peso currently at 15.16 to the UAE dirham, the currency was at 55.69 against the US dollar. The rates are expected to steadily drop in June to its lowest value point of 15.53, and drop further in the months to come, seen touching lows of 15.44 at one point in July.
The average exchange rate against the UAE dirham in May will be 15.13, with the currency staying stead compared to the previous month.
What are the factors triggering these currency movements?
The value of a country's currency is linked with its economic conditions and policies, and generally depends on factors that affect the economy.
These include factors such as imports and exports, inflation, employment, interest rates, growth rate, trade deficit, performance of equity markets, foreign exchange reserves, macroeconomic policies, foreign investment inflows, 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 a nutshell, looking at the prospects of the US dollar strengthening, the value of South Asian currencies could experience declines in the months ahead.