Dirham (AED) Exchange Rate Calculator
* Note: Exchange rates used in this calculator are approximate market averages. Real-time rates at banks or exchange houses may differ due to fees and market volatility. The AED is pegged to the USD at approx 3.6725.
Understanding the UAE Dirham (AED) Exchange Rates
The United Arab Emirates Dirham (AED) is one of the most stable currencies in the Middle East, largely due to its long-standing peg to the US Dollar. Whether you are an expatriate looking to remit part of your salary home, a tourist planning a trip to Dubai, or a business owner handling international invoices, understanding how the Dirham exchange rate works is crucial for financial planning.
The USD Peg Explained
Since 1997, the AED has been pegged to the US Dollar at a fixed rate of approximately 1 USD = 3.6725 AED. This means the fluctuation of the Dirham against other major currencies (like the Euro, Pound, or Yen) mirrors the movement of the US Dollar.
For example, if the US Dollar strengthens against the Euro, the Dirham will also strengthen against the Euro. This stability provides a predictable environment for trade and investment within the UAE.
Key Remittance Corridors
The UAE is home to a massive expatriate population, making it one of the largest sources of remittances globally. The most frequently traded currency pairs include:
- AED to INR (Indian Rupee): With millions of Indian nationals working in the UAE, this is one of the busiest remittance corridors. Small fluctuations in the rate can significantly impact the amount received by families in India.
- AED to PKR (Pakistani Rupee): The exchange rate between AED and PKR often sees volatility due to economic conditions in Pakistan, impacting the remittance power of Pakistani expats.
- AED to PHP (Philippine Peso): A vital corridor for Filipino workers. Seasonal demand often influences rates, especially around Christmas and other holidays.
How to Calculate Your Exchange
When converting money, it is important to distinguish between the "Interbank Rate" (the rate banks use between themselves) and the "Retail Rate" (the rate you get at an exchange house).
Example Calculation:
If you want to send money to India and the current rate is 1 AED = 22.80 INR.
If you send 5,000 AED, the calculation is:
5,000 (AED) × 22.80 (Rate) = 114,000 INR.
However, if you are bringing money into the UAE (e.g., converting Pounds to Dirhams for a holiday), you divide by the rate.
If 1 AED = 0.21 GBP (or inversely 1 GBP = 4.76 AED):
To convert 1,000 GBP to AED: 1,000 × 4.76 = 4,760 AED.
Factors Affecting Exchange Rates
While the AED/USD rate is fixed, rates against floating currencies depend on:
- Interest Rate Differentials: Changes in the US Federal Reserve rates usually lead to matching changes by the Central Bank of the UAE.
- Geopolitical Stability: Regional events can impact investor confidence, although the AED remains a safe haven asset in the region.
- Oil Prices: Although the UAE economy is diversifying, oil prices still play a role in overall market sentiment regarding Gulf currencies.