As many of us are patently aware, currency conversion rates can make a significant impact on an expats finances. Of course conversion rates swing and roundabout; sometimes they’re in your favour, and sometimes against. For European expats living and working in the United Arab Emirates, the experts tell us that the conversion rate just became very beneficial indeed.
Over the last few months, the value of the US dollar has been on an upward trajectory, fuelled by the USA’s economic recovery. The fact that other countries like Greece and Russia are struggling financially makes the surge in the value of the US dollar even more impressive (and valuable).
That’s all well and good, but the real question is how the price of the US dollar really benefits expats in the UAE? The answer is a simple one; the official currency of the United Arab Emirates – the Dirham – is pegged to the US dollar. A high-valued dollar therefore also makes for a high-valued Dirham.
Very few European expats move to the Gulf States permanently; instead the vast majority of expats move here for shorter periods of time, looking to capitalize on opportunities for high salaries and tax-free incomes that can transform one’s finances. While some expats may opt to buy cars and homes in the Gulf, the vast majority opt to transfer much of their spare funds to an account “back home” to use when their expatriate adventure comes to an end.
Right now, the high value of the dollar means that European expats looking to convert their money into Sterling or Euros will find one of the most impressive exchange rates for years. For anyone with a burgeoning UAE savings account therefore, now may be the perfect time to liquidate some assets and transfer your money.
At the time of writing, transforming your Dirhams into Euros can multiply the value of your savings by 15-20%; something that can make a significant difference to the overall value of your wealth. For larger sums of money this exchange rate could mean a gain that amounts to thousands of dollars in gained value.
Experts are divided just how long this fortuitous collection of events will really last. Some analysts suggest that the dollar could rise in value still further, thanks to the strength of the US economy and a degree of political turmoil in Europe. Others claim that the exchange rate will likely only be allowed to slip so far before some form of manual correction is implemented.
If in doubt, the rate is unlikely to get much better than it is right now so many cautious bankers suggest arranging any transfers sooner rather than later.