Reasons For Dubai's Strong And Stellar Economy, And The Indian Currency Rate

Posted by Karunakaran on January 28th, 2022

In the late 1950s, newly founded oil fields were introduced to the nation of UAE. These fields were vast in size, and the demand for them was sky touching. Sooner or later, the investors began gathering on the lands of central Asia to uplift their empires, and eventually, the policy of globalization helped the country grow from these activities. But is this the only reason for Dubai\'s strong economy? If not, what other fields contributed to the steady increase in UAE’s exchange rate?

Besides the profitable business of oil, Dubai prospered in Pearl Mining. For sleepy villages of the Persian Gulf, pearl extraction has to be the best source. At its birth, it was a small occupation at its birth, but as time emerged, it became a worldwide phenomenon. 

Also, due to high business yields and tourism, the UAE has achieved the title of third richest country and has provided Dubai relative independence over its economy. Over the course of time, Dubai has taken advantage of the independent policy to adopt several Jafza companies, making up20% of foreign investments. The estimated amount can be counted as approximatelybillion in non-oil companies.

The Indian currency rate in Dubai today

The exchange rates between the Indian Rupee and the UAE Dirham keep fluctuating on the scales. The rate of Rs 1 in can range between 0.0497422 to 0.050000 in Dubai. Whereas 5 INR can turn to 0.48711 AED, 10 INR to 0.497422 AED, and 25 INR to 1.24355 AED. These numbers can change their shapes depending on the factors mentioned further. 

The exchange rates between the Indian Rupee and the UAE Dirham keep fluctuating due to:

  • Determinants of exchange rate  

  • Differentials of inflation

  • Contrasting interest rates

  • Current account indebtedness

  • Public financial debts

  • Economics of trade

  • Economic performance

Why is the UAE dirham stronger than the Indian rupee?

In the battle between UAE\'s Dirham and an Indian rupee, chances are significantly weighing toward the Dirham. The reason behind it is, Dirham is pegged to US dollars, and the strength of US dollars reflects the power of the Dirham. Whereas the Indian currency\'s exchange rate is just a basket of currencies feeding on the weightage of trade and economical ingredients. 

In simple terms, UAE is 20 times healthier than India\'s GDP, and the per capita growth of the UAE is increasing like a high tide.

For this reason, the Indian exchange rates in Dubai are closely watched, analyzed, and explored by the government under specific policies. 

Exchange rates play a critical role in polishing a nation\'s trade platform; it is also vital for maintaining a stable economy in the global free market. The exchange rate is not constant and will vary according to the factors mentioned earlier; approximating the rates between a Dirham and a rupee, the approximate value comes out to be 0.05 Dirham to a rupee. 

A lower currency rate is profitable

A higher-valued currency makes a nation\'s worldwide imports inexpensive while exports are expensive. While a lower valued currency increases the imports revenue and gives a low-priced export\'s value to the foreign markets.

Hence, a lower exchange rate is profitable on many terms, and UAE has successfully adapted to its environment and increased the currency rate in Dubai.


Karunakaran

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Karunakaran
Joined: January 11th, 2021
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