Rupee, peso to depreciate further; here’s how UAE expats can benefit

A number of residents say they are able to save big on their EMIs for properties and investments back home


Waheed Abbas

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Published: Thu 22 Sep 2022, 5:42 PM

Last updated: Fri 23 Sep 2022, 11:41 AM

As the Asian and European currencies hit record lows against the dirham, the UAE residents are cashing in on weaker currencies and saving big on their equated monthly instalments (EMIs) for the investments made in their home country.

Industry executives say that expats will benefit more in the months ahead as the currencies of three Asian countries are expected to slide further against the UAE dirham.

The Indian rupee touched an all-time low of 80.47 against the US dollar (21.92 versus the UAE dirham) on Thursday morning while the Pakistani rupee hit a new low of 65.43 against the dirham on Wednesday. Similarly, the Philippines peso is also trading close to all-time lows of 15.92 against the Emirati currency.

Among the European currencies, the euro hit a lot of 3.6 while British pound touched 4.12 low versus dirham on Thursday mainly due to the strengthening of the dollar after Wednesday’s rate hike by the US Federal Reserve and the UAE Central Bank.

Bilal Ahmed, a long-time UAE resident from Pakistan, said he is now saving 36 per cent more on his EMIs as compared to one-and-half years ago due to the depreciation of the rupee against the dirham.

“When I started paying EMIs early last year, I was remitting over Dh2,400 but now I pay just over Dh1,500, hence, saving approximately 36 per cent due to currency depreciation. A major drop in currency is certainly not good for people who remit funds solely to help their families back home due to a surge in inflation, but expats who have made investments in their home countries and pay EMIs definitely benefit from the decline in currencies against the dirham,” says Ahmed.

“Expats from India, Pakistan, Philippines and Bangladesh tend to get loans from the UAE and remit it back to their home countries to meet various personal requirements. A depreciating currency in such cases acts as a boost as they get more value for their money to pay off their EMIs,” says Hasan Fardan Al Fardan, CEO of Al Fardan Exchange.

“However, with a depreciating currency, the central bank of that country tends to increase interest rates which in turn increases the EMI amount if the loan is on floating interest rates. The overall situation remains conducive for the expat if the rate of depreciation of the currency is more than the increase in interest rates of the home country,” added Al Fardan.

A LuLu Exchange representative said the loan repayments have impacted positively and people are resorting to multiple payments especially to the Philippines and Pakistan to pay off their EMIs.

Rupee, peso to depreciate further

Senior officials of currency exchange houses see the UAE dirham further strengthening against the Indian, Pakistani and Philippines currencies in the months ahead.

“India, Pakistan and the Philippines have had the most volatile currencies during this last quarter, depreciating by more than 10-15 per cent quarter-on-quarter. We have observed growth in the number of transactions, however, high-value transactions are limited as further deprecation is expected. All emerging currencies including INR, PKR and PHP are expected to depreciate by another five per cent at least, considering the economic, geopolitical and inflationary pressures,” said Hasan Fardan Al Fardan.

Moreover, he said, with a consistent increase in interest rates by the Federal Reserve to tame inflation, ongoing political conflicts, and an increase in energy prices, these currencies are expected to continue on a depreciating trajectory in the coming months.


The LuLu Exchange spokesperson said the worst is not over for the three currencies and they might weaken further.

The spokesperson said they’re seeing an average increase of three to four per cent in remittances to three countries. “We expect the volumes to go up as the high net worth clients are always looking for the drop in the currencies to shore up their investments,” he said.

Some currency exchanges reported a double-digit increase in remittances to European countries in September and a three-digit jump when compared to the same period last year.

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