Dubai is known for its opulence and luxury, attracting tourists and expatriates from all over the world. One aspect that adds to Dubai’s grandeur is its currency, the UAE dirham (AED), which is the highest currency in Dubai. Let’s delve deeper into what makes the UAE dirham the top currency in this thriving city.
History of the UAE Dirham
The UAE dirham was introduced in 1971, replacing the Gulf rupee. Initially, it was pegged to the International Monetary Fund’s Special Drawing Rights (SDRs) and had a fixed exchange rate with other major currencies like the US dollar. However, since 1997, it has been pegged solely against the US dollar at a rate of 3.67 AED per USD.
Features of the UAE Dirham
The UAE dirham comes in various denominations including coins of 1, 5, 10, 25, and 50 fils, as well as banknotes of 5, 10, 20, 50, 100, 200, 500 and 1000 dirhams. The banknotes depict different aspects of Emirati culture and heritage.
Value of the UAE Dirham
The high value of the UAE dirham can be attributed to several factors:
- Economic Stability: The United Arab Emirates boasts a stable economy with a high GDP per capita. The country’s strong economic foundations contribute to the stability and strength of its currency.
- Pegged Exchange Rate: By pegging its currency to the US dollar at a fixed rate, Dubai ensures stability and confidence in its monetary system.
This peg helps protect against inflation and volatility.
- Tourism and Business Hub: Dubai’s status as a global tourism and business hub also plays a significant role in the high value of its currency. The city attracts millions of tourists and businesses, leading to an influx of foreign currency and boosting the demand for the UAE dirham.
Currency Exchange in Dubai
When visiting Dubai, it is important to be aware of the currency exchange process. Currency exchange services are widely available throughout the city, including at airports, hotels, malls, and specialized exchange offices.
Tips for Currency Exchange:
- Compare Exchange Rates: Before exchanging your money, compare rates offered by different providers to ensure you get the best deal.
- Avoid Airport Exchanges: Exchange rates at airports are often less favorable due to higher fees and commissions. It is advisable to exchange only a small amount at the airport for immediate expenses and then find a better rate elsewhere.
- Use Authorized Providers: Choose authorized currency exchange providers to ensure reliability and security.
In Conclusion
The UAE dirham holds the distinction of being the highest currency in Dubai due to factors such as economic stability, a pegged exchange rate with the US dollar, and Dubai’s status as a global tourism and business hub. When visiting Dubai, it is essential to familiarize yourself with currency exchange procedures to make informed decisions while converting your money.