Indian rupee starts to weaken again, good news for UAE remitters

Dubai: The Indian rupee is slipping again – and that’s great news for UAE-based Indian expats looking to send money home.

After holding firm for weeks, the rupee has now fallen to 23.3 against the dirham, up from 23.1/23.2 levels seen earlier. It even touched 23.4 on June 5, the weakest it’s been in nearly two months. (Check the current Indian rupee rate here.)

What triggered this? A 0.5% interest rate cut by India’s central bank last week. That move has made the rupee less attractive to investors, pushing its value down – a welcome turn for remitters.

“A rate cut usually causes the rupee to weaken, which means more bang for your buck when remitting from the UAE,” said Krishnan Ramachandran, CEO of Barjeel Geojit Financial Services.

For most of April and May, the rupee had stayed firm around the 22.9 to 23.1 range – limiting how much expats were getting back home. That’s finally changing.

It’s possible. Global factors are also at play. The US dollar has been gaining strength after fresh data showed the American economy holding up better than expected. That’s dampening hopes of a US interest rate cut anytime soon – something that usually helps strengthen the rupee.

In short, the timing is looking better for those waiting to remit. More weakness in the rupee could follow if India’s central bank maintains a soft monetary stance in coming weeks.

“If the RBI signals it may cut rates again, we could see the rupee drop further,” Ramachandran added.

So, if you’ve been waiting for better remittance rates, now might be a good time to lock them in.