The current market bias for the INR to AED exchange rate is bearish.
Key drivers include:
• The Indian Rupee (INR) is under pressure due to forecasts suggesting it may weaken significantly against the US dollar, with predictions ranging from 90 to 94 per USD by the end of 2026.
• In contrast, the UAE Dirham (AED) can benefit from robust economic growth, projected at over 5% in 2026, supporting its stability.
• Additionally, recent volatility in the INR has seen it trading near 14-day lows against the AED, reflecting investors' uncertainty.
In the near term, the INR to AED exchange rate is expected to remain within a narrow range of its recent trading patterns.
Upside risks could arise from successful trade negotiations between India and the US, potentially bolstering the INR. Conversely, downside risks include sustained foreign investment outflows, which may further weaken the INR.