A temporary glitch in search engine Google’s currency converter tool on Wednesday showed the dirham-Indian rupee conversion rate to be much lower than it actually is, sparking confusion among Indian expats in the UAE.
The Indian rupee was shown to have briefly plunged to about 24.8 versus the UAE dirham on Wednesday, according to rates aggregated by Google.
The prices briefly fluctuated between Rs23 to Rs24.83 against one UAE dirham on Wednesday, according to Google data, which reflects real-time exchange rate data provided by US-based financial services company Morningstar.
“The rumour of the rupee weakening is a glitch supposedly seen on online search engines. The actual rates, as available with banks, exchange houses and financial service providers, wasn’t affected by the rumours,” said Adeeb Ahamed, managing director of Lulu Financial Holdings.
The rupee was trading at 73.49 against the dollar when the confusion happened, according to Ali Al Najjar, chief operating officer of Al Ansari Exchange. "The glitch had affected other currencies, not just the rupee," he said.
There was an initial spike in remittance enquiries "but none of this necessarily meant translating into transactions, as ultimately, the actual price was visible before transacting through us. Overall, it was business as usual", Lulu Financial Holdings' Mr Ahamed said.
Throughout the day, Al Ansari Exchange received many enquiries to its call centres and customers had visited branches asking about the rates of the affected currencies, Mr Al Najjar said.
"As financial service providers have access to correct information, the glitch had no impact on our system," he said, adding that at the time of writing, the Indian currency was trading at about 20.01 versus the UAE dirham.
Strategists from Swiss investment bank UBS said in a note dated August 25 they expect the Indian currency to weaken to 77 per dollar by the end of the year – more than 5 per cent weaker than current levels – and depreciate further to 79.5 by September 2022.
British investment bank HSBC, however, has a more positive view on the Indian currency. It expects the rupee to reach 73 against the dollar by year-end and says the currency will likely end flat with its end-2020 level. In the longer term, the bank expects modest fragility where the rupee could weaken to 75 against the dollar.
“A correction in the Indian stock market is expected by most investors, and along with the recent increase in global oil prices, we foresee the rupee to test 73.84 and 74.05, as well as 74.30, probably by month-end, which translates to 20.10 – 20.20 against the UAE dirham,” Mr Ahamed said.
Remittance industry experts advise expats to check currency rates with local money exchanges or banks before making any transactions.
"Always verify with your bank, exchange house or remittance service provider for the most accurate and up-to-date rates. Do not rely on the internet alone," Mr Ahamed said.
Meanwhile, Mr Al Najjar from Al Ansari Exchange recommended that users opt for "reliable sources to check currency rates and conversions such as Thomson Reuters".
Google has claimed its converter should not be the only source for conversion rates in the past when such technical glitches occurred. The disclaimer tab covers everything from the delays in updating the rates of exchange to offering no guarantees on the displayed numbers, the search engine company said.
“Google cannot guarantee the accuracy of the exchange rates displayed. You should confirm current rates before making any transactions that could be affected by changes in the exchange rates,” according to the disclaimer.
Outward personal remittances from the UAE dropped by 5 per cent, or Dh8.3 billion ($2.26bn), year-on-year in 2020, according to the Central Bank of the UAE’s annual report. Transfers through exchange houses fell by Dh18.1bn or 13.8 per cent, but outward remittances through banks increased by Dh9.8bn or 28.8 per cent, the report said.