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Dubai: Remittances from the UAE rose as some currencies, especially South Asian currencies, lost some momentum and hit favorable rates for remittances over the past few weeks. But will currency trends continue?
While the Indian rupee is expected to remain unchanged against the UAE dirham, the Philippine peso is expected to weaken further in the coming weeks. On the other hand, Pakistan rupee is expected to strengthen by mid-June. Here’s how and when you can take advantage of these great money transfer rates.
Will the national currency rise or fall?
When it comes to sending money home, it’s crucial to know if now is the ideal time to send money. To know if it is, you should first figure out whether your country’s currency will rise or fall in the next few 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 rates to come together.
Indian rupee value remains weak for now, remittances soon
The Indian rupee is currently trading at 20.31 to the UAE dirham and the currency is at 82.09 to the US dollar. The Indian rupee fell to an all-time low against the dollar in 2022, but the currency briefly strengthened at the start of the year before slipping again.
Indian rupee banknotes.
Image credit: Bloomberg
According to the latest research, the Indian rupee is expected to remain under pressure against the UAE dirham until it falls to 20.36 dirhams by the middle of next month and 20.31 dirhams by the end of the month – roughly in line with the currency’s current weakness.
It is therefore financially prudent to send money anytime between now and the middle of next month, as by the end of June you will be getting relatively little INR for the value of your UAE Dirham.
Current estimates show these end-of-month rates are expected to rise steadily from mid-June to the end of the month, before rising further in July.
As we all know, the Indian rupee has fluctuated against the US dollar recently. Overall, however, volatility has declined over the past six months.
Pakistan rupee value to rise by mid-June, then fall
In Pakistan, the USD buy rate is currently at 296.13 PKR (80.64 to UAE Dirham). With the Pakistani rupee expected to appreciate by the middle of next month, it is financially prudent to either send money now or wait until July to depreciate again.
According to the research, the PKR/AED exchange rate is expected to rise to 78.93 from current levels by mid-June before falling again. By the end of June, the value of the currency will have slipped slightly and is expected to fall further in early July.
The value of the Pakistani rupee is expected to hover at a weaker level of 80.96 for the next two months, with the value of the Pakistani rupee falling further in subsequent months.
The Pakistani rupee has been falling against the dollar in the interbank money market for months despite the central bank restricting imports and buying dollars on the open market. Since the start of 2023, the rupee has appreciated by 30.7%.
Stocks – Pakistani Rupee
Image credit: Bloomberg
Where will the Philippine Peso go in the coming weeks?
According to research, expect the Philippine peso to drop to 15.5 UAE dirhams in the next 30 days – perfect for sending money before the end of next month.
For overseas Filipino workers (OFWs) who send remittances home in dollars or currencies linked to the dollar, a weaker peso means a better exchange rate.
The peso is currently trading at 15.16 to the UAE dirham, and the currency is at 55.69 to the dollar. The rate is expected to fall steadily to a low of 15.53 in June and further declines in the coming months, having hit a low of 15.44 in July.
The average exchange rate against the UAE dirham was 15.13 in May, which was stable compared to the previous month.
Foreign exchange bureau staff count Philippine peso banknotes. While the central bank itself does not regulate bank or retail lending rates, it affects lending rates through policy rate decisions.
Image credit: Bloomberg
What triggers these currency movements?
The value of a country’s currency is related to its economic conditions and policies, usually depending on factors affecting the economy.
These factors include imports and exports, inflation, employment, interest rates, growth rates, trade deficits, stock market performance, foreign exchange reserves, macroeconomic policies, foreign investment inflows, bank capital, commodity prices, and geopolitical conditions.
The likely drop against the dirham reflected the currency’s trend of falling against the U.S. dollar, to which the UAE currency is pegged. However, if the dollar weakens, the trend will reverse.
In short, South Asian currencies are likely to lose value in the coming months on the prospect of a stronger US dollar.
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