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| 10 July, 2018

UAE expats cheer as dirham gets stronger against Asian currencies

Residents should watch market trends before sending money back home

UAE currency, 500 dirhams closeup note.
Image for illustrative purposes. Expatriate deposits made up about 11.5% of total deposits in the UAE’s central banks

UAE currency, 500 dirhams closeup note. Image for illustrative purposes. Expatriate deposits made up about 11.5% of total deposits in the UAE’s central banks

 

If you're an Asian expat in the UAE and a big-ticket remitter, hold your cash because the UAE dirham will strengthen further against the currencies of India, Pakistan, Sri Lanka, Bangladesh and the Philippines in the second half of 2018, say currency analysts.

The Emirati currency strengthened in line with the US dollar against Asian and emerging market currencies during the first half of this year, helping expats to remit more money with less dirhams during the period.

The Indian and Pakistani currencies have been consistently hitting new lows over the last few months with the former reaching 18.8 against the UAE dirham last month while the Pakistani rupee has plunged below 33.

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Similarly, Bangladeshi taka dropped to an all-time low of 23 against the UAE dirham in mid-June and Philippines' peso declined to 14.6 last month.

Going forward, Promoth Manghat, CEO, UAE Exchange Group, believes that the UAE dirham will strengthen due to more Fed rate hikes in the US.

"When the dirham strengthens, Asian expats are bound to remit more as was witnessed in the first quarter of 2018," said Manghat.

Currency analysts predict that the UAE dirham will continue to strengthen in the second half of this year, hence, advising big-ticket remitters to hold their cash for now and remit a bit later when the same dirhams will fetch more currency on remitting.

"As we enter the second half of trading for 2018, the outlook for emerging markets does not look positive," said Jameel Ahmad, global head of currency strategy and market research at FXTM.

- waheedabbas@khaleejtimes.com

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