Bias
The UAE dirham remains anchored to the US dollar through the 3.6725 peg, with a bias toward stability supported by policy alignment and solid domestic indicators.
Key drivers
- Stable peg to the USD at 3.6725 per USD, providing predictable pricing for imports and debt servicing.
- Central Bank of the UAE maintains policy alignment with the US Federal Reserve; Base Rate at 4.4% as of December 2024.
- AE Coin approved in December 2024; a UAE Dirham-pegged stablecoin aimed at modernizing digital payments and expanding settlement options.
- UAE credit growth at 14.7% year-on-year as of November 2025, signaling robust economic activity.
- Cross-currency stability in major AED pairs reflects the peg and steady domestic factors, supporting a contained FX environment.
Range
- AED to USD is steady at its 3-month average, 0.2723.
- AED to EUR at 0.2343; near its 3-month average, having traded in a very stable 2.7% range from 0.2309 to 0.2372.
- AED to GBP at 0.2032; just 0.7% below its 3-month average of 0.2046, having traded in a very stable 4.0% range from 0.2010 to 0.2091.
- AED to JPY at 7-day lows near 42.90; 1.2% above its 3-month average of 42.38, having traded in a fairly stable 5.6% range from 41.04 to 43.32.
What could change it
- A surprise shift in US monetary policy or a material move in the dollar could test the peg and prompt FX flows or central bank action.
- UAE policy tweaks that diverge from US policy could alter the domestic rate environment and FX dynamics.
- Developments around AE Coin adoption and digital payments could affect exchange flows and settlement structures.
- Changes in UAE macro indicators, oil price movements, or shifts in global risk sentiment could influence cross‑currency moves within the peg framework.
- External geopolitical developments that impact USD demand or EMFX sentiment could indirectly affect AED movements.
