During June and most of this month, the rupee had been holding up at 23.1-23.2 levels to a dirham, impacting on how much NRIs could get out of their remittances.
There were a couple of days in June when the rupee fell to 23.61 against the dirham, which was immediately after the start of the Israel-Iran conflict mid-June. But soon enough, the dollar dropped and which meant the rupee went back to 23.1/23.2 levels on the remittance side.
According to currency exchange house sources, there has been a drop in rupee remittances from the UAE during July. Part of the reason could be that many NRI residents are already on their summer breaks – but some have clearly delayed sending part of their remittances hoping for INR to come under pressure at some point in July.
Today, they are getting that.
“The rupee weakness could continue until a trade deal is hammered out between US and India,” said Neelesh Gopalan, Treasury Manager at a Dubai remittance fintech. “The pressure could rise if President Trump targets more countries with higher tariffs if deals are not struck.
“Under these circumstances, dirham-rupee could be looking at 23.4/23.5, and possibly 23.6, if the trade deal gets delayed.” (President Trump has marked 50% tariffs for Brazil and 35% for Canada, and more could be on the way.)
Watch the dollar – it’s trending
The dollar’s been having some good days, having been in the doldrums for the better part of the year since mid-January.
Currently, the dollar index is at 97.5, continuing a rally that’s already taken it past a 2-week high. The dollar index measures where the dollar stands vis-a-vis multiple other currencies. The index had been trading at 96 levels in recent weeks.
It’s the firming up past 97 that’s been the trigger for the INR and other Asian currencies slipping today.
Manoj Nair, the Gulf News Business Editor, is an expert on property and gold in the UAE and wider region, and these days he is also keeping an eye on stocks as well.
Manoj cares a lot for luxury brands and what make them tick, as well as keep close watch on whatever changes the retail industry goes through, whether on the grand scale or incremental.
He’s been with Gulf News for 30 years, having started as a Business Reporter. When not into financial journalism, Manoj prefers to see as much of 1950s-1980s Bollywood movies. He reckons the combo is as exciting as it gets, though many will vehemently disagree.
