Dubai: Remittances from the UAE were seeing an uptick as several, particularly South Asian currencies, lost a bit of momentum and recorded remittance-beneficial rates in the past few weeks. But will the currency trend continue in the coming month?
While the Indian rupee is expected to stay steady against the UAE dirham, the Philippine peso and the Pakistan rupee are seen dropping further in the weeks to come. Here’s how you can take advantage of these remittance-beneficial rates and when.
Will your currency back home rise or fall in September?
When it comes to sending money back home, it is vital to know whether it is currently an ideal time to remit. To understand whether it is or isn’t, one should first find out if your currency back home is expected to rise or fall in the days to come. Check live forex rates here (hyperlink).
Here is an analysis of how the aforementioned currencies have been performing and expected to perform in the coming weeks and month, to help understand whether remitting money now is profitable or cost-effective, or should you wait it out for a few weeks for a better rate to come along.
Philippine peso to weaken soon, postpone remittances
According to research, the value of the Philippine peso is expected to weaken to 15.87 against the UAE dirham over the next 30 days – making it ideal to remit by the end of this month, as opposed to sending money back home now.
While a weaker peso would mean a better exchange rate for overseas Filipino workers (OFWs) who send money home in US dollars, or a currency pegged to the greenback, a weaker peso would mean that you will get comparatively more pesos for your UAE dirham’s worth back home.
The peso was currently at 15.4 to the UAE dirham and at 56.56 against the US dollar. The rates are expected to steadily drop in September to its lowest value point of 15.87, and strengthen in the month after, next seen touching a high of 15.6 in October.
The average exchange rate of the Philippine peso against the UAE dirham in the first half of the year was largely around 15, so it would be cost effective to hold off sending money now given that the value of the currency is expected to weaken further by the end of this month.
Pakistani rupee to drop in the coming months, remit later
The Pakistan rupee was at 308.16 against the US dollar (83.90 versus UAE dirham), and is expected to drop as soon as next week, so it would be profitable to remit not only within a week’s time, but any time before the month-end as rates are seen falling further in the coming months.
According to research, the Pakistani rupee value is expected to drop the most to 88.57 by the end of September against the UAE dirham, from the current levels. The currency’s value is expected to hover at far weaker levels till the end of the year.
The Pakistani rupee has been falling against the US dollar and the UAE dirham in the interbank currency market for the past 12 months. Since the start of 2023, the value of the currency has weakened by over 25 per cent.
Indian rupee value to stay steady till end of 2023, remit soon
With the Indian rupee currently at 22.52 to the UAE dirham, the currency was at 82.71 against the US dollar. The Indian rupee fell to record low levels against the US dollar in 2022 but the currency briefly gained strength at the start of this year before slipping again.
According to new research, the Indian rupee is expected to stay steady against the UAE dirham throughout this month, before it ends the month at Dh22.48 – which is more or less the same level the currency is at currently.
So it is financially prudent to remit any time between now and the end of this month, as you will get more Indian rupees for your UAE dirham’s worth by September-end compared to now.
The expected month-end rates are expected to remain in the months after, until the end of 2023, current estimates revealed. While the Indian rupee has been choppy against the US dollar and the UAE dirham in the recent past, the volatility has decreased in the last six months.
These include factors such as imports and exports, inflation, employment, interest rates, growth rate, trade deficit, performance of equity markets, foreign exchange reserves, and macroeconomic policies, inflow of investments, banking capital, commodity prices and geopolitical conditions.
A possible decline against the dirham is a reflection of the decline of the currencies' fall against the US dollar on which the UAE currency is pegged. However, if the US dollar weakens, the trends will reverse.
In other words, any weakness or strength in the value of your currency in your home country against the US dollar will be automatically reflected in its exchange rate with the UAE dirham as the UAE currency is pegged to the dollar.
Bottom line? The value of South Asian currencies are widely expected to experience losses in the months ahead with the US dollar expected to rise further over the next six to 12 months. This implies more money back home when you are remitting UAE dirhams.
