UAE expats in remittance frenzy as pound sinks again
The pound fell to fresh lows on Wednesday, sparking a flurry of activity at the country’s exchange houses as British expatriates rushed to send cash home.
The British currency fell as much 0.7 per cent against the dollar, to which the UAE dirham is pegged, before paring some of those losses despite the publication of better than forecast economic data.
One British pound bought Dh4.46 on Wednesday afternoon – good news for expats sending cash home but hitting holidaymakers from the country in the pocket.
British expatriates and those from other European countries seized the opportunity to send cash home, say currency exchanges.
Promoth Manghat, the chief executive of UAE Exchange Group, said its UAE operations recorded a 25 per cent jump in remittances to Europe compared to regular volumes.
“We have always witnessed a spike in remittances when the major currencies weakens against the US dollar. Yesterday was no different as we saw remitters cashing on the favourable exchange rate and remitting to UK and Europe,” he said.
Just over a week into the new year, the pound is already 1.5 per cent lower, making it one of the world’s worst performing major currencies. Only the Mexican peso, which has lost more 5 per cent, has fared worse among the 16 major curencies.
The latest sell-off was triggered by remarks from prime minister Theresa May, who on Sunday indicated regaining control over immigration was a priority over keeping access to the EU free trade zone.
“Investors in the U.K. and overseas appear to be writing off good news on the basis that bad news lies ahead,” Neil Jones, the head of hedge fund sales at Mizuho Bank told Bloomberg News. “If a market can’t go up on good news, it must go down. Today is no exception.”
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Updated: January 11, 2017 04:00 AM