UAE residents rush to money exchange houses as British pound sinks

Some have seen business rise by as much as 20 per cent amid Brexit turmoil

UAE exchange houses have seen business increase by as much as 20 per cent over the past two days. Chris J. Ratcliffe / Bloomberg

Exchange houses in the UAE have experienced a surge in business as Brexit-inspired turmoil continues to wreak havoc on the British pound.

Some houses on Wednesday said they had experienced as much as a 20 per cent increase in volumes of sterling currency requests or wire transfers over the past two days.

The surge in business comes as British prime minister, Theresa May, faces a vote of no confidence on Wednesday, news which sent the pound plummeting to $1.248 (Dh4.58) at one point during the day — one of the lowest rates that’s been seen in months. The motion follows Ms May's decision to cancel a parliamentary vote on her unpopular Brexit deal.

But the uncertainty in the UK has a silver lining for dollar-earning British residents and others in the UAE, who can now can send money back home at very attractive rates.

Exchange house, Al Ansari, said it had seen as much as a 20 per cent increase in the past two days when compared with last year. While Al Ansari did not reveal how much has been transferred, business has been boosted across its foreign exchange and wire transfer channels.

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“There is a quite a good demand for banknotes and transfers,” said Ali Al Najjar, assistant general manager and head of operation at Al Ansari.

“Some customers are planning to travel for Christmas and are now taking advantage of the good rate,” he said. “The rate is dropping, it is now attractive and they will go and transfer.”

The Foreign Exchange and Remittance Group, a UAE network representing foreign exchange business, said it had also seen a rise in remittances from its members over the past two days, but added that some residents thought the pound could sink even lower.

“We have seen an increase in the remittances to the UK in the past two days,” said Rajiv Raipancholia, treasurer at the group. “Due to a 2.5 per cent depreciation in the rate, there is an overall increase in the volumes. I also believe at the same time that expatriates are anticipating a weaker pound in the coming weeks,” he said.

UAE Exchange said it too was seeing a rise in interest from customers about sending money back to the UK.

Promoth Manghat, group chief executive at UAE Exchange, said it has been a tumultuous year for the British Pound.

"While the pound has recovered marginally after its sharp slump to a 20-month-low of 1.124 against the [dollar], it could be susceptible to volatility in the coming weeks.

"At UAE Exchange, we are already seeing a rise in the number of queries from customers regarding exchange rates on remittances to UK. As the Brexit scenario continues to unfold, it is prudent for expatriates to keep an eye on the … exchange rates in order to get more value from their money transfers," Mr Manghat said.

Whatever the result on Wednesday, the intractability of the Brexit process seems destined to cause more instability for the British pound in the coming weeks.