The FX markets had some small but significant moves this week with the major Gulf Cooperation Council currencies – pegged and oil-backed – trading against the South Asian currencies. The millions of expats from the Gulf region followed the interbank and open market rate developments, weighing in on the timing of remittance payments to Pakistan, India and Bangladesh.
The Saudi Riyal (SAR) was relatively stable at approximately 73.80 to 73.92 PKR in the interbank market (value of SAR against PKR), and typically ranges from 74.00 to 74.40 PKR in open-market exchange outlets. The relative stability of the Saudi Riyal continues against the Indian Rupee (INR), as the currency market for the Indian Rupee remains relatively tight and little movement. This traded at about 22.40 to 22.50 against the Saudi Riyal, when calculated against the Bangladeshi Taka (BDT), was around 32.00 to 32.20 BDT, with strong demand for remittance pushing up values in this currency pair.
In the same manner, the UAE Dirham (AED) proved resilient against its South Asian and Asian partners. The Dirham traded between 75.35 and 75.60 PKR in Pakistan money exchanges for the week, gaining slightly but remaining relatively resilient to Pakistan’s zeroed-in import responsibilities and foreign reserve sustainment. Its strength against the Indian Rupee was maintained by the 22.85 to 22.95 INR range. For the week, a close of 32.65 to 32.85 AED to Bangladeshi Taka was observed as demand for middle-eastern trades and expatriate worker remittances remained unabated.
It was the same case with most high-value GCC dollar currencies. The prominent currency in the world, the Kuwaiti Dinar (KWD), recorded healthy numbers in the currency market. Each Kuwaiti Dinar was worth anywhere in the range of 882.00 to 894.00 PKR in the currency exchanges of Pakistan. The same was worth 274.00 to 276.00 INR in India and 390.00 to 393.00 BDT in Bangladesh.
Earlier in the day the Qatari Riyal (QAR) remained round about 75.80 to 76.25 PKR, 23.00 INR in Indian open markets, 32.90 BDT in Bangladesh but the Bahraini Dinar (BHD) sustained its valued worth of 732.50 to 738.40 PKR in Pakistani open markets, 223.50 INR in India and 318.00 BDT in Bangladesh.
In general, the weekly trends indicate stable exchange circumstances for the GCC currencies being pegged to the US dollar. The steady state of the Saudi Riyal, UAE Dirham and other Gulf neighboring currency units make it a more reliable conversion rate for the South Asian migrant populations to transfer money to their home countries while global macroeconomic recalibration and central banks’ interventions in foreign reserve management remain active players in determining the daily exchange rates across South Asia.