The Dubai currency is known as the UAE dirham (AED), which stands for Arab Emirates dirham. It is the official currency of the United Arab Emirates and is used in Dubai, one of the seven emirates that make up the country.
What is AED?
AED is the three-letter currency code for the UAE dirham. It is derived from the official name of the currency, which in Arabic is “درهم إماراتي” (dirham imarati). The AED has been in circulation since 1973 when it replaced the Qatar and Dubai riyal at par.
The UAE dirham is subdivided into smaller units called fils. One dirham is equivalent to 100 fils. Coins are available in denominations of 1, 5, 10, 25, and 50 fils, while banknotes are issued in denominations of 5, 10, 20, 50, 100, 200, 500, and 1000 dirhams.
History of AED
The UAE dirham was introduced on May 19th, 1973 by the United Arab Emirates Currency Board. Before that, several currencies were used in Dubai including Indian rupees and Gulf rupees. The establishment of a common currency for all seven emirates helped to facilitate trade and economic cooperation among them.
Inflation has been relatively low in the UAE compared to other countries in the region. This stability has contributed to the trust and acceptance of the AED both domestically and internationally.
AED Exchange Rate
The exchange rate of AED varies against other major currencies like USD (United States Dollar), EUR (Euro), GBP (British Pound), and many more. The exchange rate is determined by several factors including the UAE’s economic performance, interest rates, inflation, and global market conditions.
The UAE dirham is pegged to the US dollar at a fixed exchange rate of 1 USD = 3.67 AED. This peg provides stability and predictability for businesses and individuals transacting in AED.
Using AED in Dubai
In Dubai, the use of AED is widespread, and it is the only accepted currency for most transactions. Cash is commonly used for smaller purchases such as groceries, transportation fares, and street markets.
Credit cards are widely accepted in hotels, restaurants, shopping malls, and other establishments. Most major international credit cards such as Visa, Mastercard, and American Express are accepted in Dubai.
Tips for Handling AED
- Check Exchange Rates: Before traveling to Dubai or exchanging currency, it’s advisable to check the current exchange rates to get an idea of how much your money will be worth.
- Carry Small Denominations: Having small denominations like coins and smaller banknotes can be useful for everyday expenses and convenience.
- Budget Wisely: Plan your expenses and budget accordingly to manage your spending effectively during your stay in Dubai.
In Conclusion
The UAE dirham (AED) is the official currency of Dubai and the United Arab Emirates. It has a rich history dating back to its introduction in 1973. The AED’s stability, exchange rate pegged to the US dollar, and widespread acceptance make it convenient for both residents and visitors when conducting transactions in Dubai.
So, when you visit Dubai, make sure to familiarize yourself with the AED currency and enjoy your time exploring the wonders of this vibrant city!