Indian rupee recovers; should expats remit?

Indian expats residing in the UAE are undoubtedly monitoring the recent pullback in the USD/ INR currency pair, which has fallen from a peak of 88.87 to 87.80 as of now.

- Somshankar Bandyopadhyay [e-mail]

A remittance centre in Dubai. The rupee was trading at 23.92 per UAE dirham on Thursday, up from 24.20 on October 9. - FILE PHOTO

This marks the rupee’s longest stretch of gains since June and has further room to run after the Reserve Bank of India (RBI) signaled a willingness to intervene in the FX markets to defend the currency.

The rupee was trading at 23.92 per UAE dirham on Thursday, up from 24.20 on October 9. Against the US dollar, the currency has tried to breach the 88.80 level several times in recent weeks, but it has been in vain. The Indian rupee (INR) has shown signs of resilience against the US dollar over the past month, recovering slightly from its record lows earlier this year. However, analysts caution that the currency faces persistent headwinds and may remain under pressure through the remainder of 2025.

In October, the rupee strengthened by approximately 0.28 per cent, trading around Rs88.06 per dollar as of October 21. This modest recovery was largely attributed to intervention by the Reserve Bank of India (RBI), which conducted multiple dollar-selling operations to curb speculative positions and stabilise the currency.

The INR/US dollar exchange rate fluctuated between Rs87.95 and Rs88.81 during the month, with the rupee hitting a one-month high amid RBI support and reduced dollar demand from importers. Despite this uptick, the rupee remains down 4.72 percent year-on-year, reflecting broader macroeconomic challenges.