UAE dirham likely to stay strong

UAE dirham likely to stay strong

De-dollarisation unlikely to affect greenback's domination, expert says

Amro Zakaria, senior market analyst – Mena at Forex.com

Published: Tue 26 Sep 2023, 10:35 PM

The UAE dirham is expected to retain its strength for the rest of 2023 and the country is set to enter 2024 in lock step with the US Dollar due to the peg, experts said at the Forex Expo Dubai 2023.

“Economic growth seems to support keeping the interest rates in step with that of the US, as according to Fitch Ratings forecasts overall GDP growth to slow to 2.1 per cent in 2023 and 3.6 per cent in 2024 after close to 8 per cent in 2022, with non-oil sectors driving growth,” Amro Zakaria, senior market analyst – Mena at Forex.com, told Khaleej Times in an interview.

Excerpts:

What is the outlook for regional currencies, especially the UAE dirham, for the rest of 2023?

Swiss Re forecasts the UAE economy to expand by 3 per cent in 2023, with non-oil sectors driving growth. The IMF’s Representative Exchange Rates for Selected Currencies for September 2023 lists the UAE Dirham at 3.6725. Mesirow’s 2023 Currency Outlook notes that the USD remains overvalued against most major currencies, but as inflationary pressures ease, the Fed will