The INR to AED exchange rate is currently bearish.
Key drivers impacting this trend include:
- The interest rate differential favors the AED as the UAE Central Bank maintains a firmer monetary stance compared to the Reserve Bank of India.
- Recent forecasts predict a weakening of the INR, with some analysts projecting values around 90 to 92 per USD by early 2026.
- Economic growth in the UAE is robust, with a forecasted GDP growth rate of 5.3% in 2026, further supporting the AED.
In the near term, the exchange rate is expected to oscillate within a relatively tight range as it remains near recent lows.
An upside risk could emerge from potential positive developments in US-India trade negotiations, which might enhance the INR's value. Conversely, continued foreign investment outflows from India could pose a downside risk, driving the INR further down against the AED.