UAE Investments Rising Amid Weak Indian Rupee

Sending Dirhams to India or UAE Investments? Weak Rupee Forces New Strategy for Expats

The Indian community living in the United Arab Emirates is reconsidering whether it's worth sending money back home or keeping their savings in the UAE. This decision is driven by the Indian rupee plummeting to new historic lows against the UAE dirham, reaching an exchange rate of 24.0762. This surpassed a previous record set on September 1st (24.0681).

Due to the weak rupee, many Indian expatriates are holding off. Some fear that the currency may weaken further, while others have already switched strategies: investing their savings in the UAE or holding onto US dollars to minimize value loss.

More People Are Delaying Remittances

In recent years, it was common for Indians working in the UAE to regularly send part of their earnings back home to support their families, buy real estate, or invest in India. Now, more people are choosing the "wait and watch" tactic. They hope that if the rupee weakens further, they can remit more money from the same amount of dirhams.

The continuous weakening of the Indian currency is caused by global economic uncertainties, questions surrounding the US government's trade policies, and tariff measures against India. Although the Reserve Bank of India (RBI) occasionally intervenes to prevent excessive exchange rate fluctuations, the general trend remains downward.

Local Investments Instead of Remittances

Indian workers in the UAE increasingly perceive that remitted money is worth less in India and its purchasing power continues to decrease due to inflation. Many decide to seek opportunities in the UAE instead of investing in Indian real estate or stocks: they opt for fixed-income deposits, invest in US dollar-based assets, or buy shares on local stock markets.

The changing approach is often driven by personal experience. A case from ten years ago shows that while investing in India didn't yield good returns despite rising property prices, investments in the UAE would have resulted in higher returns over the same period.

Exceptions: When Remittances Are Unavoidable

Of course, not everyone can or wants to wait. Some are compelled to remit money tied to specific dates or events. This could be for a religious festival like Onam or an urgent family expense. In such cases, currency exchange rates matter less: necessity overrides financial rationality.

Those who can wait often use exchange rate monitoring apps that instantly notify them when market conditions become favorable. Such apps are increasingly popular among UAE residents, enabling swift decision-making and cost-effective money transfers.

Digital Transfers or Traditional Money Exchange?

With technological advancements, more Indians choose online applications over traditional money exchange offices. These apps not only provide faster and more convenient solutions but often offer better exchange rates as well. Moreover, transactions are easily trackable, and fees are more transparent.

Financial startups and fintech companies in the UAE are competing to offer better services to the diaspora. As digital transfers become widespread, more opportunities arise to optimize savings and investment decisions—even in real time.

Inflation Risks in India

Alongside continuous currency weakening, another significant factor is Indian inflation. Rising consumer price indices at home mean the same amount today is worth less than before. This particularly affects those supporting retiree parents, children, or other family members in India.

Therefore, remitting money involves not only currency but also inflation losses. Consequently, many seek structures that can at least partially compensate for value loss or completely shift their financial focus to the UAE or international markets.

A New Financial Awareness Emerges

The current foreign exchange market situation forces Indians in the UAE to rethink their financial habits. It's no longer just the "send home as much as you can" mindset dominating, but a more conscious, strategy-based approach is emerging.

More people are opening local bank accounts, investing in the stock market, or starting businesses in the UAE. This not only secures their own future but may also signal a decreasing confidence in the Indian economy.

Summary

The rupee's new historic low is not just an exchange rate figure but a significant turning point in Indian expatriates' financial behavior. Some living in the UAE no longer see the value in regular remittances and are instead leveraging local opportunities. This trend could have long-term serious implications for Indian foreign currency earnings, especially if current economic uncertainties prove to be persistent.

So the question is: will the rupee stabilize in the coming months, or will confidence in the UAE dirham strengthen, and a new era of investments in the Emirates begin instead of remittances?

(Source: Based on Indian exchange rate fluctuations.)