Dubai: The intensification of Israel’s strike on Iran’s nuclear installations has caused the Indian rupee to fall to an 8-week low of 23.46 against dirham (86.17 vs dollar). In recent days, the INR was trading at 23.30 levels versus the dirham. This morning’s almost 0.7% decline gives Indian expats in the UAE the chance to receive better exchange rates if they are sending money home.
After Israel attacked Iran, oil prices increased by 10% in the hours that followed. Neelesh Gopalan, Treasury Manager of a remittance fintech company located in Dubai, stated that “new Middle East tension is the immediate reason for INR sliding to 23.46 against dirham, but the other main worry is about US tariffs.” “India is yet to negotiate a tariff deal with the US – and Trump has just mentioned the July deadline again.
Currency specialists predict that pressure on the Indian rupee will continue. For the Indian economy to maintain its growth rates, the cost of importing oil would be the biggest concern. Given that the rupee is now trading at about 86 to the dollar, any further geopolitics escalation will worsen currency pressures. Worries about inflation would be heightened and India’s current account deficit would grow if crude oil prices rose over $80-85.
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