Dubai: The Indian rupee has seen a sharp dip following a significant 0.5% interest rate cut announced by the Reserve Bank of India (RBI), potentially opening a window of opportunity for Indian expats in the UAE and Gulf countries to remit money at more favourable rates.
As of now, the rupee is hovering around ₹22.30+ against the UAE dirham, after briefly touching ₹23.40 on June 5 — a noticeable drop from the recent average of ₹23.10–₹23.20.
This weakening trend may benefit non-resident Indians (NRIs), especially those who had held back remittances in anticipation of a softer rupee. For the past few months, the Indian currency had remained relatively strong against both the US dollar and the dirham, limiting conversion benefits for remitters.
“A rate cut typically weakens the INR by narrowing interest rate differentials with the US,” said Krishnan Ramachandran, CEO of Barjeel Geojit Financial Services.
“The full impact depends on RBI’s forward guidance. A dovish tone could lead to further depreciation, while a neutral outlook might stabilize the currency.”
RBI’s Third Rate Cut in 2025
This latest cut marks RBI’s third rate reduction this year, signaling a shift from its earlier tightening stance in previous years. The 0.5% drop was widely expected and matches what the market dubbed a “jumbo cut”.
“Indian expats are clearly benefiting from stronger exchange rates compared to last week’s range of ₹23.25–₹23.28 per dirham,” said Neelesh Gopalan, Treasury Manager at a Dubai-based fintech firm.
“It’s particularly good news ahead of the Eid holidays — remitters now get more value for every dirham or Saudi riyal sent home.”
What This Means for NRIs
With the rupee likely to stay under pressure in the short term, this may be an opportune moment for Indian expats to transfer funds to take advantage of the better exchange rates. However, future moves will depend on the RBI’s tone in upcoming statements and broader global economic cues.
Bottom line: For NRIs looking to remit money to India, the current dip in the rupee may be just the window they’ve been waiting for.
