UAE expats rush to relocate currency as pound falls again

Published:  12 Jan at 6 PM
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Following yet another fall in the value of sterling on Wednesday, British expats working in the UAE rushed to transfer funds back to the UK.

Sterling fell a further 0.7 per cent against the US dollar, the local currency to which the dollar is pegged, starting a rush by UK expats to send even more money back home and causing remittance transactions to rise above the norm by 25 per cent. Expats from neighbouring European states also took the advantage to increase their savings simply by relocating them to their home countries.

The losers were holidaymakers enjoying the heat and spending money in the region’s upscale malls, with the exchange rate at Dh4.46 to one British pound. According to a major UAE foreign exchange company, it’s no surprise that cash flew out of the UAE heading for the UK and Europe, as spikes in remittances always happen when major currencies fall against the dollar.

According to the National newspaper, at this point in time sterling is one of the worst-performing currencies on the planet following its further fall of 1.5 per cent since the start of 2017. This week’s sell-off was motivated by PM Theresa May’s comments Sunday that her Brexit priority was to control immigration as against retaining access to the EU free trade zone.

A comment in Bloomberg News stated UK and overseas investors are ignoring good news and looking ahead to what they see as bad news in the near future, causing the market to fall as a result of its being unable to rise. For expats living in the UAE, the continuing low price of oil and its resulting lower earnings have caused fewer overseas remittances but the stronger US dollar is expected to somewhat negate the impact.
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