Dubai Forums Dubai Expat Forums Dubai Expat Help Forum

Guys & Gals,

I would be very appreciative for any advice anyone can give. I am currently in the process of agreeing my contract with my prospective employer in Dubai. I am moving over there from the UK. Is it going to have a large (detrimental) impact further down the road if I agree it in AED as opposed to pounds sterling?

I am just aware of the fact that the AED is fixed against the dollar but not against the pound and I am worried that in 4-5 years time if/when I come back then I will be hit for six.

Any words of wisdom (or any words at all really) will be gratefully received.

Nick

nick

the dollar is at a 26 year low against sterling. If the rate drops and it will, you will be better off agreeing the rate as at now. Then when the rate drops you will be better off in getting more £'s to AED.

USD sucks and it will still be in the future. And straight impact to AED.
Stick to GBP or Euro if you could. Unless there will be a bounce back in the future.

Sounds familiar this as I had exactly the same problem myself a couple of months back.

At that time I was offered an AED figure and a sterling figure (which was basically AED divided by 7.2

I decided to take the AED figure and since then the exchange rate is nearer to 7.6 so I would have been at least a few hundred pounds per month better off than I am now had I took the sterling figure.....

Opinions are obviously divided on this but a knowledgeable frend tells me that the problems that have caused the dollar to weaken are not likely to go away in the near future, the knock on effect being that the dirham may stay weak. I cannot however see the dollar getting significantly weaker than it is now. Sooner or later the dollar will bounce back, so you can always save up the camel credits and cash them in when the rate is better.

I think the biggest question though is where are your liabilities and responsibilities - for me as I am commited to being in dubai long term and only have minimal liabilities in the UK I am happy to be paid in the local currency.

It's a tough call.

just to add to the indecision... there is a good chance that the AED will de-link from the dollar in the near future (as with the Kuwaiti Dinars) thus very likely to appreciate...

cu

Guys,

Thanks for all your input. The contract being offered is paid in AED's and they are not giving me a choice really. Im guessing I would be hard pushed to try and persuade them to pay me in Sterling. Then I have to take into account the bank charges and tax issues if I was using a UK bank account over there permanently. I think I am just going to settle for being paid in Dirhams.

Nick.

M! wrote: in between 3 month the US are gonna be a 3rd world country ...

And exactly how many $terling, euros, dinhars, yen, etc. etc. are you going to put down on that bet

I had to make this choice about four months ago (when you got AED7.2 to the pound sterling) and opted for sterling. It's obviously worked out fairly well for me so far - at current rates I'm effectively getting an extra AED15K a year, which is nice. I also have the slight advantage of hedging as that my missus is paid in AED.

In the end, it's a gamble - currency markets are unpredictable and volatile things, and can easily swing by quite a few percentage points within a year. I can't see the USD getting substantially stronger in the next year or two... on the other hand, I can't believe it'll get that much weaker than it is now.