Dubai: Remittances from the UAE have picked up as some currencies, particularly South Asian currencies, have lost some steam and hit prime rates for remittances over the past few weeks. But will currency trends continue in the month ahead?
While the Pakistani rupee is expected to hold steady against the UAE dirham, the Philippine peso and Indian rupee are expected to strengthen further in the coming weeks. Here’s how and when you can take advantage of these money transfer rates.
Will your domestic currency appreciate or depreciate in July?
When sending money home, it’s important to know if it’s an ideal time to send money. To find out if it exists, you should first find out whether your country’s currency is expected to appreciate or depreciate in the coming days.View real-time foreign exchange rates here.
Below is an analysis of the performance and expected performance of the aforementioned currencies in the coming weeks and month to help understand whether it is profitable or cost-effective to send money now, or if you should wait a few weeks for better outcome rates to come.
Indian rupee value to rise further soon, send money now
The Indian rupee is currently trading at 22.34 to the UAE dirham and 82.05 to the US dollar. The Indian rupee fell to a record low against the dollar in 2022, but the currency briefly strengthened at the start of the year before slipping again. Now see the rise again.
According to new research, the Indian rupee is expected to stabilize against the UAE dirham until the middle of next month, when it is expected to hold at 22.3 dirhams before reaching 22.1 dirhams by the end of the month – which is weaker than the currency is currently.
It is therefore financially prudent to send money anytime between now and the middle of next month, as by the end of July or the beginning of August you will be getting relatively few Indian rupees compared to the UAE Dirham.
Current estimates show that the current low end-of-month rate is expected to rise steadily from mid-July to the end of the month before rising further in August.
It is understood that the exchange rate of the Indian rupee against the US dollar and the UAE dirham has fluctuated greatly recently. However, overall volatility has declined over the past six months.
Pakistani rupee value stable for now, remittances coming soon
In Pakistan, the current dollar buying rate is 287.84 Pakistani rupees (78.37 UAE dirhams). According to the research, the PKR/AED exchange rate is expected to rise sharply from current levels to 77.47 by mid-July before falling again.
The currency’s value will decline slightly towards the end of July and is expected to stabilize in early August. With the Pakistani rupee expected to rise by the middle of next month, it would be profitable to send money now or wait until the end of July when it falls.
The currency’s value is expected to hover at a weaker level of 78 over the next two months, about the same level of weakness the currency is currently at, before plunging further in value for the Pakistani rupee in the months ahead.
The Pakistani rupee has been falling against the U.S. dollar and the UAE dirham in the interbank money market for the past six months. Since the beginning of 2023, the value of the currency has lost about 27%.
Where will the Philippine Peso go in the coming weeks?
According to research, the value of the Philippine Peso to the UAE Dirham is expected to rise to 14.7 in the next 30 days, so sending money now is more ideal than sending money by the end of next month.
While a weaker peso means that Overseas Filipino Workers (OFWs) will have a better exchange rate sending money home in US dollars or a currency pegged to the US dollar, a stronger peso means you will get relatively little in pesos, equivalent to UAE dirhams The value of returning home next month.
The peso is currently trading at 15.06 to the UAE dirham and 55.30 to the dollar. Rates are expected to rise steadily to a peak of 14.7 in July, before falling further in subsequent months, with a low of 15.33 expected in August and September.
The average Philippine peso to UAE dirham exchange rate was 15 in June, so sending money now is a good deal given the expected improvement in the currency’s value in July.
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What are the factors that cause these currency fluctuations?
These factors include imports and exports, inflation, employment, interest rates, growth rates, trade deficits, stock market performance, foreign exchange reserves, macroeconomic policies, investment inflows, bank capital, commodity prices, and geopolitical conditions, among others.
The dirham is likely to fall against the dirham, reflecting a downward trend for the UAE currency against the dollar. However, if the dollar weakens, the trend will reverse.
In other words, since the UAE currency is pegged to the US dollar, any weakness or strength of your country’s currency relative to the US dollar is automatically reflected in its exchange rate to the UAE dirham.
Bottom line? In short, with the US dollar expected to weaken further in the coming months, South Asian currencies may see gains in value in the coming months as this is the general trend. This means that when you send UAE dirhams out, you get less money back home.