The exchange rate forecast for the UAE Dirham (AED) to Indian Rupee (INR) offers a mixed picture moving forward. Currently, the AED to INR rate is trading at approximately 24.66, reaching 90-day highs and standing 1.9% above its three-month average of 24.18, with a stable trading range from 23.89 to 24.66. This appreciation can largely be attributed to strengthening trends in the AED, fueled by a robust economic outlook for the UAE and expectations of potential rate cuts from the U.S. Federal Reserve, which have positively influenced Gulf markets.
The International Monetary Fund's projections for economic growth in the UAE are notably optimistic, citing a 6.0% growth forecast for Abu Dhabi and a 3.4% forecast for Dubai in 2025. This economic momentum contrasts with the challenging situation facing the Indian Rupee. The INR has recently hit a record low against the U.S. dollar, driven by a combination of factors, including a widening trade deficit exacerbated by tariffs on Indian exports and significant foreign investment outflows. Reports indicate that nearly $17 billion has been withdrawn from Indian equities in 2025 alone.
Analysts note that the Reserve Bank of India is adopting a policy that allows for a weaker rupee as it grapples with declining dollar inflows and seeks to manage excessive volatility. This creates downward pressure on the INR, which may encourage higher AED to INR rates in the near term. Furthermore, the recent depreciation of Asian currencies, including the INR, against the AED has improved the purchasing power of expatriates in the UAE, particularly for those remitting money home.
In summary, while the UAE Dirham is poised for strength due to positive economic signals and external factors influencing the U.S. dollar, the Indian Rupee faces significant headwinds that could further elevate the AED to INR exchange rate in the coming months. Investors and individuals considering currency exchanges should remain alert to these developments for potential savings on international transactions.
