UK remittances from UAE forecast to rise as pound in doldrums

UK remittances from UAE forecast to rise as pound in doldrums

Remittance flows from the UAE to the UK are expected to increase on the back of a strong US dollar and recent declines of the British pound.

The sterling has fallen to its lowest level against the US dollar since 1971 after the UK Government unveiled its “mini-budget”.

The sterling reached $1.035 (AED 3.82) early on Monday, stopping short of the much-dreaded parity with the dollar, before rebounding as the day progressed. As of Tuesday morning, the pound edged higher again in the Asian markets.

The markets have reacted to the raft of tax cuts announced by UK Chancellor of the Exchequer Kwasi Kwarteng, who also scrapped caps on bankers’ bonuses, saying it would encourage bankers to invest and pay taxes in London.

Rashid Ali Al Ansari, CEO of Al Ansari Exchange, said UAE residents had already been taking advantage of the US dollar-pegged dirham in recent months by remitting higher amounts, particularly for tuition fees, mortgage payments and investment schemes.

“This trend of a strengthening dirham is continuing [its] momentum and residents will continue to take advantage of this situation,” he said.

“Since there is a sizable number of residents in the UAE who send money to the UK for tourism, tuition fees, as well