Business | Investment
Expatriates cheer gains for greenback
Many of the UAE's more than 3.6 million expatriates are now enjoying a windfall from the stronger US dollar, as the value of remittances to various countries have soared after home currencies fell against the greenback.
- By Cleofe Maceda, Staff Reporter
- Published: 23:43 October 29, 2008
Dubai: Many of the UAE's more than 3.6 million expatriates are now enjoying a windfall from the stronger US dollar, as the value of remittances to various countries have soared after home currencies fell against the greenback.
The volume of money flows to labour-supplying nations such as India and the Philippines is likely to increase. At the same time, expatriates who have mortgage obligations back home will have more leftover money to spend in the UAE.
Still, other expatriates in the UAE are looking to put their savings in US dollar accounts, to maximise and enjoy higher returns on their unspent income.
"It's practical to keep US dollars this time because the conversion rate is higher," said Rose Manaog, a Filipino expatriate in Dubai.
According to Lorraine Pacey, an expatriate from Australia, the rise of the greenback also proves to be a boon to workers who have mortgages in their home countries, as "they need to allocate less dirhams each month to cover their mortgage payments."
"This means they have more spending money here in Dubai. The rise of the US dollar has also been great for me and I'm sending as much money back as I can afford to each month at the moment," Pacey told Gulf News. "The rise in the US dollar also makes me feel a lot better about my salary when I convert it to the Australian equivalent," Pacey added.
The decision of UAE authorities to keep the dirham pegged to the dollar is seen as a relief to the working expatriates - British, Filipinos and Indians - who were among the hardest-hit when the greenback plunged for months.
"It is obviously a good time for expats, particularly from the UK and US, to be sending funds home as the dollar, hence the dirham, has appreciated a great deal over the past few months," said Alan Hill, head of Commercial Bank of Dubai's treasury sales.
"For expats who have been in the region a long time, rates such as these haven't been seen for some time and for newcomers, there has been an instant benefit," Hill added.
He could not say, however, if remittances to the UK will rise, as most British expats have set commitments and tend to save outside their home country.
Emma Cabello, a resident from the Philippines, said the peso equivalent of every Dh1,000 she earns in Dubai jumped from 12,070 pesos in June to almost 13,000 pesos in September.
The same is true for Indians, whose income, according to another expatriate, has risen by an estimated nine per cent.
"For an Indian like me, dollar strengthening could mean that we are richer by nine per cent without doing much and has gained much more. However, it is a good time to save money only if we can cope with the rising cost of living here," the expat said.
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