Indian rupee dives to a record low against UAE dirham

The Indian rupee has continued to see its value erode.

It opened on Monday at INR69.47 against the dollar, nearly 0.9 per cent down from Friday’s closing rate of INR68.84.

The fall in the value of the rupee comes on the back of a strong demand for the American currency by banks and importers.

Impending trade wars between major markets like China and the US as well as currency volatility in other emerging markets has exacerbated the freefall.

Read: Aramco, ACWA and US-based Air Products to form $8bn JV in Saudi

The UAE dirham is pegged to the US dollar. The fall in the value of the rupee compared to the dollar, means that the dirham has strengthened against the rupee.

According to the Khaleej Times, this morning Dhs1 yielded INR18.93.

The falling rupee has also meant that the Indian Sensex dropped 0.75 to 37,584.96 in the opening trade this morning.

The strengthening dollar and consequently the dirham has led to a strong growth rate of remittances.

The UAE saw a 17.3 per cent surge in remittances year-on-year in the first quarter, according to the central bank.

Remittances were up Dhs6.5bn ($1.76bn) to Dhs43.5bn ($11.84bn) compared to Dhs37.1bn ($1bn) in the same period last year.

Read: UAE first quarter remittances surge 17.3%

Indian transfers accounted for 36.7 per cent of remittances compared to 8.8 per cent for Pakistani transfers and 6.9 per cent for Filipino transfers.

With a large expat population in the UAE, remittances from the UAE are quite large. Remittances for the whole of 2017 were up 2.2 per cent in 2016 to Dhs164.3bn ($44.7bn).