Dubai: UAE exchange houses have witnessed a spike in the volume of remittances from the UAE to the United Kingdom since the Brexit vote on Friday that sent the sterling falling to a 31-year low.

The British currency sank to $1.3230 on Friday, the lowest level since 1985, after the announcement that Britain had voted to leave the European Union. The sterling plummeted further to $1.320 on Monday at 12.10am, London time.

The weakening of the sterling against the US dollar is good news for expatriates in the UAE, especially for the British nationals, whose monthly incomes are pegged against the US dollar. The lower the sterling drops, the more money can be sent home.

As of Monday morning, transfer operators have seen more funds flowing through the cash registers, with some exchange houses reporting that transactions have gone up by eight-fold.

“The weaker [British pound] did impact remittances to the UK positively. It’s advantageous to British nationals in the UAE as the dirham is pegged to the US dollar, which has grown stronger against the GBP,” Promoth Manghat, CEO of UAE Exchange, said in a statement sent to Gulf News.

“The spike in remittances recorded a whopping eight-fold increase compared to our regular average.”

Sudhesh Giriyan, COO of Xpress Money, noticed the same trend, which is expected to continue over the next few weeks. “We have definitely observed a surge in volumes from the high ticket customers,” Giriyan told Gulf News.

The UAE is the fourth top remittance-sending country in the world, according to the World Bank, with aggregate outflows representing 4.8 per cent of the country’s gross domestic product (GDP). Although a huge chunk of the money flows benefits a number of Asian countries, including India, Bangladesh and the Philippines, the UK is also one of the recipients of remittances from the UAE.

With the Indian rupee also falling to a four-month low after the Brexit vote, money transfers between the UAE and India are also seeing an increase. However, currency experts cautioned that a weaker pound or euro could negatively impact money outflows from the UK and Europe, where millions of migrants from Asia are based at.

“For expatriates and migrants in Europe and the UK, the fall in GBP and euro means a reduction in spending power, which could have a negative impact on outward remittances from the European region in the medium term,” said Giriyan.

“In the long run, we expect remittances from the Middle East to the UK and Europe to remain healthy. However, intra-Europe remittances, and those coming out of the UK, will depend on economic vibrancy, and the deals made in terms of the free movement of people.”

Manghat also cautioned that a weaker pound or euro and a stronger US dollar will have a negative impact on domestic tourism and real estate, as the two countries are major sources for these sectors.

Money exchange houses, however, clarified that there has been no significant increase in foreign currency transactions involving the purchase of pounds in the UAE following the Brexit vote.

“We don’t see customers frantically buying pounds in the UAE nor is there any shortage of pounds in the country,” said Giriyan.

“There has been only a marginal increase in foreign exchange since the public mandate on Brexit. We are yet to experience a major shift and we expect it to rise as travel season is round the corner. Summer travelers will pick up more GBP when it is weaker for later use,” added Manghat.