The recent exchange rate forecasts for the Indian Rupee (INR) to UAE Dirham (AED) indicate a complex interplay of domestic and global factors affecting the currency movements. As of October 19, 2025, the INR to AED exchange rate is at 90-day lows near 0.041326, slightly below its 3-month average of 0.041695. The exchange rate has remained stable, trading within a 2.1% range, reflecting both resilience and pressure points.
Key developments influencing the INR include the Reserve Bank of India's (RBI) market intervention to stabilize the rupee, which involved selling up to $5 billion. This decisive action on October 15 has resulted in the largest single-day gain for the rupee in four months, with a subsequent tilt towards the rupee in the options market. Analysts noted that the 1-month 25-delta risk-reversal for the USD/INR pair has reached its lowest level since 2012, indicating increased demand for rupee call options.
However, the Indian economy faces challenges, particularly from the U.S.-India trade relations. The recent imposition of substantial tariffs by the U.S. on Indian exports, combined with rising gold imports, has contributed to ongoing pressures on the rupee. Economists suggest that a strengthening U.S. dollar, driven by the Federal Reserve's monetary policy, continues to exert downward pressure on the INR.
On the other side, the AED has shown stability bolstered by positive economic indicators. The UAE's recent currency swap agreement with Turkey, valued at 18 billion AED, is expected to enhance liquidity and streamline financial transactions, which could support the dirham's value. Additionally, the International Monetary Fund's optimistic growth forecast of 4.8% for the UAE economy presents a robust outlook that underpins the AED.
As businesses and individuals navigate the currency market, the insights reflect a cautionary yet optimistic stance. Currency analysts and experts recommend monitoring the geopolitical landscape and economic indicators closely, as shifts in U.S. monetary policy and further developments in trade relations may significantly impact the INR to AED exchange rate in the near future.
