The current exchange rate for AED to SAR is at a 60-day high of approximately 1.0221, reflecting stability within a narrow range of 0.9% over the past three months, between 1.0141 and 1.0231. Analysts attribute this stability to positive economic indicators from the UAE, including a projected growth rate for Abu Dhabi's economy at 6.0% and Dubai at 3.4% for 2025, buoyed by strong non-oil sectors and increased oil production.
Recent forecasts highlight a potential shift in the U.S. interest rate landscape, as the Federal Reserve indicated possible rate cuts due to signs of a softening labor market. This prospect has boosted investor sentiment towards Gulf markets, enhancing the overall attractiveness of the UAE Dirham. Additionally, a notable rally in the U.S. dollar over the summer of 2025 has contributed to a favorable exchange environment for expatriates within the UAE, allowing for better remittance rates.
Moreover, the weakening of several Asian currencies, such as the Indian and Pakistani Rupees, against the Dirham has strengthened the purchasing power of expatriates sending money home, further supporting the Dirham’s position in the market.
Meanwhile, the Saudi Riyal remains firmly pegged to the U.S. dollar at a fixed rate of 3.75 Riyals per dollar, limiting its volatility. As long as the underlying economic fundamentals remain intact and external factors such as the U.S. interest rate environment remain favorable, the AED is expected to trade within its current range against the SAR.
In summary, the anticipated economic growth in the UAE, combined with a nurturing external climate for the Dirham, suggests a stable outlook for the AED to SAR exchange rate, aligning with current market conditions. Keeping abreast of U.S. monetary policy developments will be crucial for any future positional changes.
