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 is expected to stay steady against the UAE dirham, the Philippine peso and the Pakistan rupee are seen dropping further 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 July?
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.
Philippine peso to weaken soon, postpone remittances
According to research, the value of the Philippine peso is expected to weaken to 15.43 against the UAE dirham over the next 30 days – making it ideal to remit by the end of this month, as opposed to sending money back home now.
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 mean that you will get comparatively more pesos for your UAE dirham’s worth back home.
The peso is currently at 15.1 to the UAE dirham, the currency was at 55.71 against the US dollar. The rates are expected to steadily drop in August to its lowest value point of 15.43, and strengthen in the months after, next seen touching a high of 14.70 in November.
The average exchange rate of the Philippine peso against the UAE dirham in June is 15, so it would be cost-effective to hold off sending money now given that the value of the currency is expected to weaken further by the end of this month.
Pakistani rupee to drop before rebounding, remit soon
In Pakistan, the buying rate of the US dollar was currently 287.88 Pakistani rupee (78.38 versus UAE dirham). The Pakistan rupee is expected to drop by the middle of this month, so it would be profitable to remit in a couple of weeks, before it rebounds back to current level by month-end.
According to research, the Pakistani rupee value is expected to drop the most to 81.76 by mid-August against the UAE dirham, from the current levels, before bouncing back again. The currency’s value is expected to hover at weaker levels of 83 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 eight months. Since the start of 2023, the value of the currency has weakened by around 25 per cent.
Indian rupee value to slip soon, postpone remittances
With the Indian rupee currently at 22.55 to the UAE dirham, the currency was at 82.84 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 slip against the UAE dirham by the middle of this month to Dh22.86, before it ends the month at Dh22.78 – which is a still weaker than the current levels the currency is at.
So it is financially prudent to remit any time between the middle of this month and the end of it, as you will get more Indian rupees for your UAE dirham’s worth by August-end compared to now.
The expected low month-end rates are expected to recover in the months after, current estimates revealed. It is known that the Indian rupee has been choppy against the US dollar and the UAE dirham in the recent past. However, the volatility has been decreased in the last six months overall.
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? Despite near-term weakness, the value of South Asian currencies are widely expected to experience gains in the months ahead with the US dollar expected to fall further over the next six to 12 months. This implies lesser money back home when you are remitting UAE dirhams.
