Stock Money exchange rupees
UAE dirhams and Indian rupees at Lulu Exchange in Sharjah. It's good to go - UAE's Indian expats have already sent in their remittances when the rupee dropped below 21 earlier this week. Now, many are hoping the current levels would remain until their next salary credit. Image Credit: Ahmed Ramzan/Gulf News

Dubai: The Indian Rupee has dropped further to 21.12 against the dirham, raising the possibility of India’s central bank intervening to stabilise the currency for the first time since it dropped below the 21 level.

“So far, there is no sign of any move by RBI (Reserve Bank of India), but some action on its part seems imminent,” said an FX trader based in Mumbai. “Will that happen at 21.15/21.20 level is the question.”

Through Thursday morning, the inter-bank rate was hovering in the 21.08-21.12 range. In the UAE, currency houses on Thursday (May 12) were changing dirhams to rupee even at 21.05/Dh level. Whoever had spare money to remit had already done so as soon as the 21 mark was breached on May 9, say currency exchange officials. “The sentiment among many was that the 21 or over levels would not be allowed for long and that the RBI will enter and buy dollars to bring the rupee back to 21.80/21.90 levels.

“So, even though a dirham has fetched 21.05 today, remittance volumes are relatively low. Everyone would be hoping this remains so until their next salary gets credited.”

Indian markets are having a tough day, with the benchmark Sensex down nearly 1,000 points by 11.30am IST.