What are Best Foreign Currencies to Exchange When Visiting Dubai?
While it’s strange to countenance tourism hotspots in the wake of the Covid-19 pandemic and subsequent lockdown measures, there’s little doubt that nations across the globe are beginning to tentatively reopen their borders to international travellers.
This is particularly true in the case of relatively prosperous regions such as the United Arab Emirates, which at the most recent count boasts total foreign assets of around Dhs405.94 billion. This is according to the region’s central bank, while the figure also hints at strong year-on-year growth and overall positive markets for the UAE market economy.
Despite continued diversification, of course, tourism remains central to the UAE’s economic vision, with an estimated 8.36 million tourists visiting Dubai alone during the first half of 2019. But what currencies are accepted in the UAE, and which ones offer the best value in the current market climate?
What Currencies Can You Use in the UAE?
There are some who believe that only the Emirati Dirham and similar regional currencies can be used in the UAE, but this does not take into account the sustained evolution of the region and the Middle East as a whole over the course of the last few years.
So, although there are some restrictions in terms of the currencies that are accepted in Dubai and the UAE, the fact remains that most of the world’s major fiat currencies can be used at retail outlets and hotels or exchanged for the dirham.
At the head of this ever-lengthening queue is the US Dollar, of course, which is currently accepted in most places and establishments nationwide. This is also arguably the most widely used foreign currencies in the UAE, and we’ll touch on the core reasons for this a little later in the piece.
Similarly, both the GBP and the Euro are widely used and accepted in the UAE (and particularly Dubai), and there’s also a genuinely good reason for this.
Not only do these entities represent two of the most influential currencies in the world, for example, but it’s also estimated that more than a quarter of the region’s tourists make their way from Europe and the UK on an annual basis.
Increasingly, emerging currencies are also being accepted in Dubai and the Middle East. Take the Indian rupee, for example, which can now be used to buy goods and services directly at the region’s airports and main consumer shops.
This is part of a growing trend, although we should note that the exchange rates between the dirham and emerging currencies are typically more volatile and harder to predict.
What are the Best Exchange Rates?
This brings us neatly onto the topic of the best currencies for exchange, if you intend to transfer a lump sum of domestic cash into the dirham ahead of your trip.
The single most favourable exchange rate is typically provided by the dollar, primarily because the dirham has been actively pegged to the value of the greenback. This is largely because oil prices are denominated in US dollars, and the UAE region remains disproportionately reliant on this commodity and the oil industry as a whole.
So, by pegging the dirham to the greenback, the UAE government has been able to reduce the volatility of its main exports and sustain economic prosperity. This also translates into more manageable and less volatile exchange rates, which is music to the ears of international travellers.
Thanks to the basic factors of supply and demand, both the pound and the Euro also offer viable exchange rates in relation to the dirham. This trend is even more prevalent today, as factors such as Brexit and the Covid-19 pandemic impact heavily on the UK and Europe and cause their associated currencies to trade in increasingly narrow ranges.
Just remember that dirham exchange rates can fluctuate wildly outside of the USD, so keep your eyes on the real-time price points before making a transfer.
