UAE Dirham getting stronger and stronger each day!
UAE is known for its multiculturalism with hundreds and thousands of expatriates residing within the region. It is due to this diversity of nationalities within the country that UAE imports a lot of raw as well as finished good products from various countries around the globe.
Thus, the export prices have plummeted for the authorities in the region for countries like Turkey, India, and Pakistan that contribute primarily to major exports in UAE up to around 80%. This drop in the prices have resulted in further strengthening the Dirham against some major world currencies and added to UAE’s economic value. Over the past few months, Dirham has strengthened over 20% against Pakistani rupee, 10.5% against the Indian currency, and 11.7% against possibly the most leading economic hub in world i.e. Chinese Yuan. Another prominent decline has been noticed for Turkish Lira which has dropped by almost 80% in its value against dollar-pegged currencies over just a period of 8 months.
In this context, Anita Yadav, the Head of fixed income research at the renowned Emirates NBD Research stated: “The US dollar – and consequently the dirham – has strengthened against the emerging market currencies this year and this does help in reducing the import prices. However, the total inflation contains several components such as housing and education bill that do not get impacted by import prices”.
In addition to this, Yadav also predicted that the recent inflation in the country is 3.1%, which is further expected to reduce in the proceeding months given the sudden boost in the currency value.
Thus, this robust improvement in Dirham’s value is sure to open new trade doors for UAE and reap noticeable benefits for the region’s economy in lieu of its current economic forces.
Such strong currency value is yet another factor that contributes to making the UAE economy an ideal fit for investment in property as well as life.