The UAE Dirham (AED) has seen pronounced fluctuations in recent weeks, influenced by various strategic developments and exchange rate trends. As of October 2, 2025, a notable currency swap agreement between the UAE and Turkey, valued at 18 billion AED, aims to bolster liquidity and enhance financial transactions between the two countries. Analysts believe this move will positively impact trade relations and could lead to stabilized exchange rates against the Turkish Lira.
In September 2025, Dubai's strategy to attract British property buyers amidst a weakened AED—approximately 8% lower against the British pound—has resulted in significant investments in the real estate sector. Reports indicate that British investments in Dubai properties surged by 62% year-on-year in Q2 2025, showcasing the effectiveness of this strategic shift during challenging economic conditions.
Recently, the UAE Central Bank's decision to cut interest rates by 0.25 percentage points has also prompted a positive market reaction, with both Dubai and Abu Dhabi stock indices rising post-announcement. This interest rate adjustment aligns with similar moves from the U.S. Federal Reserve and plays a crucial role in influencing currency exchange rates.
Current exchange rates indicate that the AED is stable against the US dollar, maintaining a steady position around its three-month average of 0.2723. against the Euro, the AED has reached 30-day highs at 0.2341, positioned just above its three-month average while trading within a stable 4.1% range. The performance against the British pound is slightly positive, with a recent high of 0.2032, reflecting a modest 0.5% increase over its three-month average. Furthermore, the AED is enjoying strength against the Japanese yen, trading at 41.55, which is 3.1% above its three-month average.
Overall, forecasters suggest that the combination of strategic agreements and monetary policy adjustments will likely support the stability of the AED in the near term, creating a conducive environment for both investors and traders engaged in international transactions.
