Indian rupee could hit 19.65 against UAE dirham next week
Indian rupee on Monday slumped to new low of 19.39 against UAE dirham in line with decline in currencies of emerging economies and analysts expect rupee’s free fall will continue in coming days.
Rajiv Raipancholia, CEO, Orient Exchange, said rupee’s free fall is due to more dollar flowing into India as exports become cheaper due to rupee depreciation.
He predicted that the rupee hitting 19.65 against dirham is quite possible in the next 10 days.
The Indian currency, which has been consistently under pressure, fell to 19.22 last Wednesday and Khaleej Times had reported that rupee will slide below 19.33 in the next few days.
Currencies across emerging markets have been lately subdued due to the global trade war concerns and higher oil prices.
“More dollar is being remitted to India due to growing exports. Plus, Reserve Bank of India is also not intervening and want rupee’s free flow. Hence, rupee hitting 19.65 is quite possible next week or in 10 days,” said Raipancholia.
“At the moment, Reserve Bank of India will not intervene because India needs dollars and exports from India is improving,” he said, adding that customer in the UAE are remitting now.
“There has been 15 to 20 per cent spike in remittances from the UAE over the last 3 months, which is a good sign for the industry,” he added.
However, Raipancholia said rupee depreciation is fuelling inflation in the country which the government needs to look into.
The Indian rupee reversed all the gains made earlier in the day to close at an all-time low of 71.21 per dollar on Monday, tracking a weak trend among its global peers and amid concerns of a wider trade deficit.
On Friday, it settled at 70.99-71, after hitting a low of Rs71 per greenback.
Currencies across emerging markets have been lately subdued due to the global trade war concerns, analysts said.
