Hold on to your cash: Rupee breaches 20 vs dirham; could fall further

A man counts Indian currency notes inside a shop in Mumbai, India.- Reuters file photo

Dubai - Analysts and experts said the Indian currency could fall between 20.4 to 21 against the dirham by the year-end.

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By Waheed Abbas

Published: Tue 2 Oct 2018, 10:00 PM

Last updated: Wed 11 Jan 2023, 12:34 PM

The Indian rupee on Tuesday hit historic lows against the UAE dirham by crossing the psychological barrier of 20. The currency was exchanging at 20.05 in early trading and is expected to remain under pressure due to growing current account deficit.

Analysts and experts said the Indian currency could fall between 20.4 to 21 against the dirham by the year-end.

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Rajiv Raipancholia, CEO, Orient Exchange, said as per international rates, the rupee hit 20 against dirham but this cannot be taken as real market here in the UAE as the Indian markets were closed on Tuesday due to a public holiday. He said the UAE residents can get real rates only on Wednesday when banks and exchange companies resume work in India after the public holiday.

"Rupee is going to breach 73.00 level against dollar or 19.87 against dirham and move initially to 73.50 or 20.00 against dirham, when market opens on Wednesday unless there is an aggressive intervention by Reserve Bank of India," Raipancholia added.

As for Indian expats, according to Sudhesh Giriyan, COO, Xpress Money, they stand to gain on the amount they are remitting back home due to favourable exchange rates. "It is an ideal time for NRIs to invest in the country and in-turn, pump more money into the economy."

Vijay Valecha, chief market analyst at Century Financial Brokers, said US sanctions on Iran along with strong Asian demand means that oil prices are likely to remain higher and this indicates that pressure on Indian rupee is unlikely to abate.

"Under these circumstances, it would not be surprising to see rupee touching 20.60 and 21.10 against the dirham in next six months and one year respectively," he said.

-waheedabbas@khaleejtimes.com

Waheed Abbas

Published: Tue 2 Oct 2018, 10:00 PM

Last updated: Wed 11 Jan 2023, 12:34 PM

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