The exchange rate outlook for the UAE Dirham (AED) against the Indian rupee (INR) has been shaped by several influential developments over the past two months. As of December 4, 2025, the AED is trading at 14-day lows near 24.38 INR, marginally above its three-month average of 24.22 INR, indicating a stable performance amidst fluctuations.
Analysts note that expectations surrounding potential rate cuts from the U.S. Federal Reserve have driven investor optimism in Gulf markets, strengthening the AED. The depreciation of various Asian currencies, including the INR, against the Dirham has further enhanced the purchasing power of UAE expatriates sending remittances back home. Despite this positive momentum for the AED, the recent strengthening of the U.S. dollar, as reported in July 2025, remains a critical factor influencing its value.
Conversely, the Indian Rupee continues to face significant challenges, as reported by experts. The INR has reached a record low of 90.42 per U.S. dollar, with a 5% decline over the past year. A widening trade deficit, worsened by a steep 50% U.S. tariff on Indian exports, and substantial foreign investment outflows—totaling nearly $17 billion—have put considerable pressure on the rupee. The Reserve Bank of India's recent policy shift to allow the rupee to weaken in response to these challenges underscores the ongoing volatility in the Indian currency market.
Forecasts from market analysts suggest that without prompt remedial measures, the INR could continue to face downward pressure, with some anticipating a potential drop to 92 per USD if a swift U.S.-India trade resolution is not achieved. Overall, while the AED shows resilience and strength, the INR's persistent vulnerabilities create a challenging landscape for those relying on this pair for international transactions.
