The exchange rate between the UAE Dirham (AED) and the Qatari Rial (QAR) has been relatively stable recently, with the AED trading at 14-day highs near 0.9937. This level is close to its three-month average and shows strong resilience within a tight trading range of approximately 0.6%, fluctuating between 0.9901 and 0.9956. This stability may reflect analysts' expectations of steady demand for the AED amid ongoing economic developments in the UAE.
Geopolitical tensions in the region, particularly the recent military strikes by Israel on Iran, have led to a spike in oil prices and general market volatility. As oil prices are a significant factor affecting the QAR, which is closely tied to Qatar's energy sector, this volatility could indirectly impact the AED/QAR exchange rate. The price of Brent Crude oil is currently at $77.01, considerably higher than its three-month average of $67.35. However, it has exhibited substantial volatility, trading within a 31.1% range from $60.14 to $78.85. Analysts suggest that such fluctuations could generate further uncertainty in the QAR's value.
On the economic front, the Arab Monetary Fund forecasts that the UAE's economy will grow by 6.2% in 2025, driven by a resurgence in sectors such as tourism, real estate, and international trade. This positive outlook may support the strength of the AED. However, challenges remain as recent data indicate a slowdown in the growth of the UAE's non-oil private sector, which recorded its weakest performance in nearly four years. This could temper expectations regarding the dirham's appreciation.
Moreover, ongoing trade negotiations between the UAE and the U.S. to reduce tariffs on steel and aluminum exports may influence the trade balance, potentially affecting the AED's exchange rate dynamics. Alongside these developments, significant investments in artificial intelligence to diversify the economy could yield long-term benefits for the AED.
With these elements in mind, stakeholders, including travelers and business owners, should remain vigilant about the evolving factors that may influence exchange rates between the AED and QAR, particularly in light of geopolitical and economic trends.