Business | Investment
Expert believes dollar will gain in the medium term
Expatriates in the UAE need not worry much over the weakening US dollar, as a financial expert predicts the greenback will likely gain ground in the medium to long term.
- By Cleofe Maceda, Staff Reporter
- Published: 01:04 February 8, 2008
Dubai: Expatriates in the UAE need not worry much over the weakening US dollar, as a financial expert predicts the greenback will likely gain ground in the medium to long term.
"Most importantly, expats and workers remitting money home need, like everyone affected by the credit crunch, to take a long-term view of the issues," said Chas Roy-Chowdhury, head of tax at the Association of Chartered Certified Accountants (ACCA).
He explained that the value of currencies is cyclical, so the "dollar will gain ground and will be worth more to expatriates in the medium to long term".
"Many currencies - not just the dirham - are linked to the US dollar and workers may find fluctuations in their homeland currencies, which may work for or against them in the short term, but will even out in the longer term," he added.
Many of the expatriate workers in the UAE have complained that they are taking a beating from the fall of the dollar.
The rising Indian rupee and Philippine peso, for instance, have reportedly wiped out the earnings of two expatriate groups in the UAE, making the country a less attractive employment destination.
Analysts predicted that the two currencies will continue to appreciate, further eroding the purchasing power of the expats.
Should workers decide to hold on to their dirhams while the dollar is still falling, Roy-Chowdhury said idle money can be invested in stocks, shares or commodities.
"If workers want to find alternative homes for their money, they need to again be prepared to take a long-term view. Stocks and shares will make money over the long term, but are best avoided if you need to get your money quickly," Roy-Chowdhury told Gulf News.
"Equally, commodities like gold should - because of the booming economies in India and China - remain in high demand from consumers and should keep their relative value," he added.
But before taking any decisions, ACCA's expert said workers should get advice and watch how stocks, shares and commodities perform.
Stocks and shares will make money over the long term, but are best avoided if you need to get your money quickly."
Chas Roy-Chowdhury
Association of Chartered Certified Accountants
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