By James Mathew
Currency market traders says there could be a slight pull back in rupee value against dollar within the next few days
The UAE Dirham (AED) strengthened to 19.62 against Indian rupee on Thursday, making a gain of 42 paise or 2.18 percent against the Indian currency in just 12 days.
AED’s exchange value against rupee was 19.20 on November 2. Since then, AED has been consistently strengthening against rupee to reach 19.64 on Wednesday, a 2-month high since 3 September.
The Indian currency’s biggest fall, however, was against US dollar, losing 62 paise in a day on Wednesday to reach 72.08 against the Greenback.
Contraction of India’s industrial output to a 7-year low and global credit rating agency Moody’s changed outlook on India are said to be the main reasons which dragged rupee down against most foreign currencies in the last two days.
Banking circles said they expect a jump in NRI (non-resident Indian) remittances, especially from the Gulf region, in the wake of the significant fall in rupee value against US dollar and AED in the last few days.
Movement of rupee against AED and also the US dollar has a major influence on remittances and transfers by NRIs working in the Gulf region, to India.
“We see a spurt in foreign fund inflows and remittances, especially from the Middle East region, whenever rupee see major depreciation (against USD),” said Ravi Ranjit, senior executive with Federal Bank, who deals with the overseas operations of the bank.
Currency market traders, however, said there could be a slight pull back in rupee value against dollar within the next few days.
“Despite the prevailing overall bearish sentiment, our technical chart shows a slight pull back in rupee value against US dollar by next week,” Ajay Kedia, managing director of Kedia Commtrade and Research, told Arabian Business.
“Rupee could pull back to 71.50 level by next week, after probably hitting a low of 72.80 or so against dollar,” Kedia said.
According to market analysts, weak macroeconomic factors and a sudden jump in retail inflation, besides global factors are among the key factors that are keeping the rupee wobbly.For all the latest currencies and forex rate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.