Discover the Shocking Rise of AED Against INR from 1973 to 2025

🏛️ Pre-1973: When the Gulf Used the Indian Rupee

Before the introduction of the UAE Dirham, the Trucial States (now the United Arab Emirates) used the Gulf Rupee, which was pegged to the Indian Rupee (INR). In June 1966, India devalued the Gulf Rupee, prompting a major shift:

• Most Gulf states switched to the Qatar-Dubai Riyal

• Abu Dhabi adopted the Bahraini Dinar

• In 1973, the UAE Dirham (AED) was officially introduced

This marked the beginning of a new era in the AED to INR exchange rate history.

💰 1973–2007: Introduction of UAE Dirham and Initial Currency Stability

In 1973, the UAE Dirham replaced earlier regional currencies and was pegged to the US Dollar at a fixed rate of 1 USD = 3.6725 AED — a rate that still exists today.

While the Dirham stayed stable due to the USD peg, the Indian Rupee began to depreciate gradually due to economic challenges, inflation, and balance of payment issues. This marked the foundation of the long-term depreciation of the Indian Rupee against the UAE Dirham, a trend that would accelerate in the following decades.

This was the foundation of the long-term depreciation of Indian Rupee against Dirham.

📊 2008–2025: The Dramatic Rise of AED vs INR – Year-wise Data

This period saw the UAE Dirham appreciate significantly against the Indian Rupee. Here's a year-by-year timeline showing how 1 AED in INR changed:

🔎 Quick Fact: From ₹13 in 2008 to ₹23.64 in 2025, that's an 81% increase in the AED-INR exchange rate.

👉 For the latest live UAE Dirham to Indian Rupee exchange rates, visit  UAElocal Currency & Exchange Directory, where you can check updated currency conversion rates and historical data.

🔍 Why Has the UAE Dirham Gained So Much Value Against the Indian Rupee?

1. Stable UAE Dirham Peg to USD

The AED is pegged to the US Dollar, which has strengthened significantly over time. Since 1 USD = 3.6725 AED, and the USD to INR rate went from ₹40 (early 2000s) to ₹80+, the Dirham naturally rose along with it.

2. Indian Rupee Depreciation Due to Economic Policies

Several key events led to the decline of the Indian Rupee:

• 1991 economic liberalization (Rupee moved to market-based exchange)

• 2008 financial crisis

• 2016 demonetization

• COVID-19 pandemic impact

• 2025 RBI liquidity measures

Each of these added pressure on the INR, weakening it over time.

 Indian rupee depreciation history

3. Oil Prices & UAE’s Trade Advantage

As a major oil exporter, the UAE benefited from high oil prices. India, as a net oil importer, faced inflation and trade imbalances — causing the Rupee to lose value relative to stable Gulf currencies like the Dirham.

Note: Oil prices impact on INR, Dirham vs Rupee exchange rate

4. Central Bank Policies

The UAE Central Bank closely follows the US Federal Reserve

The Reserve Bank of India (RBI) often uses monetary easing, which increases liquidity but also weakens the Rupee

📍 AED to INR in 2025: Current Exchange Rate Snapshot

📅 As of June 20, 2025

💱 1 AED = ₹23.59 (mid-market rate)

This marks a near doubling of the exchange rate from the ₹12–₹13 range seen in the early 2000s.

Final Thoughts: What’s Next for INR vs AED?

The Indian Rupee’s consistent depreciation and the UAE Dirham’s peg to a strong dollar have caused the AED to strengthen year after year.

Unless:

• The Indian economy undergoes significant structural reforms

• The US Dollar weakens globally

• Or inflation in the UAE rises faster than in India

...the INR to AED exchange rate is likely to remain high or increase further.