Frequent travellers know very well that the currency market can impact the holiday budget. Currencies continuously fluctuate and if you can secure a good exchange rate, you will make your cash go a long way.
So, if you intend to use cash for the most part of your journey, it is essential that before you head to vacationville you know what currency is best to use.
If you're travelling to the Eurozone, it is only logical that you bring euros. For other destinations, popular currencies such as the dollar can sometimes work to your advantage because you are likely to get a good exchange rate locally. But this may not apply to countries where exchange houses are limited, in which case a safer bet would be to bring the currency of your destination.
The good thing about using dollars is that there can be no loss in exchange due to currency fluctuations because the UAE dirham is pegged to the greenback.
"When travelling outside Europe and the US, it is sometimes beneficial to take a more popular currency if it is not possible to take the local currency. Currencies such as the dollar, euro, or even the pound are better than the dirham. These are widely accepted and should offer better rates of exchange than carrying the UAE dirham," advises Chris Canning, a currency analyst at First Rate FX.
Since you need to change your dirhams before departure, your main goal is to find out how or where you can buy foreign currency as cheaply as possible.
"Usually, the trick for cash is to convert some to the currency you will need at an exchange house before you leave the UAE. Shop around by phone before doing so," says Steve Gregory of Holborn Assets.
Changing your money at the airport is not recommended because you can end up paying more for every single currency you buy.
"The worst thing that any traveller can do is get his or her currency at the airport. The airport exchange outlets take advantage of naive travellers by charging high commissions," notes Canning.
There are several currency specialists who can deliver foreign money free of charge, either to your home or place of work. This kind of service is not only commission-free, it "generally" offers better exchange rates.
"These cash services allow individuals to pay using a debit card and the majority can be organised over the internet, meaning that the whole process can be completed in minutes," Canning adds.
"Alternatively, specialised exchange houses can also offer preferential exchange rates. If you live or work nearby then these can offer good rates of exchange and have the added benefit that you do not have to wait for the funds to arrive in the post."
Wellington Selladurai, senior manager for corporate sales at Al Rostamani International Exchange, advises that if possible, travellers should buy the destination's currency before leaving Dubai.
So, if you go to Singapore, try to bring Singapore dollars to ensure you won't be inconvenienced looking for a good money changer when you arrive.
"Compared to the destination, you will get a better rate here because different currencies are available here, so the trading happens in a larger way. Whereas, if you go to a particular country and buy only when you reach there, your choices can get restricted and the rates can be higher," he says.
Getting best deal
On June 14, Gulf News conducted a quick survey of specialised exchange houses in Dubai, from Deira to the airport, to find the best rates.Money changers in Deira and Naif Road gave the most favourable rates, as well as small-time exchange houses.
Experts say small money changers are likely to give better rates due to their low overheads.Currencies were more expensive at exchange shops in the malls, international airport and in prime locations where commercial rent is rather high.
A close look at the exchange rates revealed that buying €1,000 can cost Dh205 to Dh268 more if you change your money at the airport. If you buy from a shop in the mall, €1,000 can cost you Dh47.60 more than what you will get from a money changer in Naif.
Exchange houses in Deira can also give you different rates and if you do your homework, you can spend Dh47.60 less on your €1,000.You can also get better rates if you negotiate for a discount and if you sound convincing enough, you can save as much as Dh60 for every €1,000.