Indian rupee hits six-week low; now trading at Rs15.07@Dh1

The new year has begun well for the UAE’s Indian expats, with the rupee tumbling against the US dollar – and the dollar-linked UAE dirham – to a six-week low on Monday, extending losses for a third straight session.

The Indian rupee slipped to Rs15.05 against the UAE dirham at 3pm before closing the session marginally stronger at Rs15.03 vs. Dh1, its weakest close in six weeks. The rupee was trading at Rs15.07 against the UAE dirham at 9am UAE time on Tuesday, and showing signs of further weakness.

The rupee last closed below this level on November 29, when it ended at Rs15.16 against the UAE dirham.

With the latest decline happening in the first week of the month, a number of remittance houses in the UAE were seeing doing brisk business as Indian expats got a favourable exchange rate (~Rs14.95 vs. Dh1) at the exchange counters.

The latest round of forex movements come more as a result of weaker rupee rather than a stronger dollar. The UAE dirham (US dollar) remained muted against other major expat currencies, including the Philippines peso, Pakistan rupee and Bangladesh taka.

Indian economy is seen at a crossroads, with ballooning fiscal and budget deficits taking their toll on the country’s currency, which has shed more than a quarter of its value in the past 18 months.