Indian expats heave a sigh of relief as the rupee hits seven-week low

Non-resident Indians (NRIs) in the UAE and elsewhere across the Gulf and, indeed, the world, are breathing a little easy as the Indian rupee is seen reversing its recent gains, falling to a seven-week low in early trade this morning.

The Indian rupee has once again broken the 50-mark against the US dollar, and was trading at Rs50.72 against 1 US dollar at around 8.20am UAE time (4.20am GMT) this morning.

The UAE dirham, which has a straight peg to the US dollar, therefore strengthened against the Indian rupee, with Dh1 fetching Rs13.80 at 8.20am UAE time. The rupee touched a four-month high of Rs13.23 against the UAE dirham on February 4, 2012 – the strongest it has been this year – but has since shed more than 4 per cent.

Rising oil import payments thanks to a higher international oil price, and a waning of international investor interest in the emerging market due to a diminished risk appetite and India’s weak financial projections are being cited as reasons for the rupee’s recent slide.