\u200dLiving in the melting point of the UAE, with our multiple nationalities and extensive travels, means that most of us are attune to dealing with more than one currency at a time. When it comes to currency exchange however, there are ways to be savvy and there are ways to be not! Follow our guide and arm yourself with all you need to know\u2026<\/p>\n\n\n\n
An exchange rate is essentially a price and can be analysed in the same way we would a price of two items in a supermaket. Pick up something in the supermarket, for example, and in exchange for a set number of dirhams, we walk away with that item. Sell that item on the other hand, and we get a set number of dirhams in return.<\/p>\n\n\n\n
When we speak of X to Y exchange rate of Z, this means that if we give up 1 unit of X, we get Z units of Y in return.<\/p>\n\n\n\n
Put simply exchange rates refer to the relative prices for different currencies.<\/p>\n\n\n\n
Optimising currency exchanges is much a matter of timing. Convert one currency to another when the exchange rate is not ideal and you could find yourself with far less than anticipated. In the past, most people would simply turn to their local bank to obtain their exchange rate and buy or sell currency but in recent years, lots of highly specialised currency companies have arrived on the scene.<\/p>\n\n\n\n
\u2022 More competitive exchange rates
\u2022 A more personalised service
\u2022 Faster transfer times<\/p>\n\n\n\n
A good exchange company combines financial expertise, the latest technology and a round the clock trading presence to ensure they secure the best possible deals for you.
Currency exchanges for expats<\/p>\n\n\n\n
Many expats will move their savings offshore or \u2018home\u2019 from the UAE. Likewise, if buying a property or carrying out some other big transaction, perhaps you need to bring money held elsewhere into the UAE. The dirham is pegged to the dollar but if having to convert from or to Sterling for example, you need to be smart with timing and take into account fluctuating exchange rates.<\/p>\n\n\n\n
It is of course, impossible to predict how rates will move, but a handy tool is forward fixing or forward contracts, whereby you fix the price for a currency transaction. This gives you certainty about your future capital inflows and outflows. If, for example, Sterling is looking strong against the US Dollar, then it\u2019s a good time to take action. This would also apply to other currencies that are pegged to the US Dollar, such as the Omani Riyal, Bahraini Dinar, Qatari Riyal or Saudi Riyal.<\/p>\n\n\n\n
Below is a definition of a forward contact along with other foreign exchange products available:<\/p>\n\n\n\n
\u2022 Forward Contracts A forward contract allows you to fix a rate now for a date in the future\u2026 often up to two years ahead). This means the rate is fixed regardless of exchange rate moves, thereby protecting you if the exchange rate moves against you.
\u2022 Spot Contracts If you already have the funds in place, you could arrange a spot transaction. This is simply the exchange of one currency for another at the current market price where the settlement happens within two working days.
\u2022 International Currency Exchange Options A currency option, like a forward contract, allows you to exchange one currency for another on a future date, thereby protecting you from negative movements in the exchange rate. However, with an option, if the rate moves in your favour you can still take advantage of this.
\u2022 Regular Payments If you expect to exchange a set amount of funds on a regular basis, for salary transfers, mortgage repayments or pension payments for example, you can set up a regular payment order which will automatically transfer the funds on a regular basis.<\/p>\n\n\n\n
Travelling overseas and in need of some local currency?<\/p>\n\n\n\n
Avoid wherever possible, exchanging money at the airport where commission is high and rates of exchange are poor. Plan in advance instead and you can squeeze every last dirham out of your budget. When it comes to deciding where to get your foreign currency, the key question to ask is how much currency will you get, after all the charges, in exchange for your dirhams? Whichever currency converter gives you the most is the one to go with.<\/p>\n\n\n\n
Commission charges normally come in three formats.<\/p>\n\n\n\n
1. Minimum charges \u2013 expensive if you\u2019re only exchanging small amounts of money
2. Flat fees \u2013 can be good value because they don\u2019t change, even if you\u2019re exchanging large sums of money
3. Handling fees \u2013 what the currency seller charges for its exchange services<\/p>\n\n\n\n
Note that some currency sellers advertise commission-free foreign exchange, but they could be making up for the loss of commission with higher exchange rates. As a result, this could actually be more expensive than if you\u2019d just paid commission.<\/p>\n\n\n\n
Also, if you anticipate bringing back any leftover currency, it\u2019s worth checking the buy-back rate too. If you can find a company that will buy back your currency for free, then you won\u2019t have to pay out twice.<\/p>\n\n\n\n
If you remember one thing: Currency markets are volatile and unpredictable. You can make them work for you or allow them to work against you. Your hard earned money deserves a little forward planning and smart timing to ensure you don\u2019t lose out when transferring from one currency to another.<\/strong><\/p>\n\n\n\n \u200d<\/p>\n","protected":false},"excerpt":{"rendered":" Expat Guide to Currency Exchange What You Need to Know \u200dLiving in the melting point of the UAE, with our multiple nationalities and extensive travels, means that most of us are attune to dealing with more than one currency at a time. When it comes to currency exchange however, there are ways to be savvy […]<\/p>\n","protected":false},"author":6,"featured_media":864,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[],"class_list":["post-884","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-facts"],"_links":{"self":[{"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/posts\/884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/comments?post=884"}],"version-history":[{"count":0,"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/posts\/884\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/media\/864"}],"wp:attachment":[{"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/media?parent=884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/categories?post=884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yallacompare.com\/blog\/uae\/en\/wp-json\/wp\/v2\/tags?post=884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}