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What is AED (United Arab Emirates Dirham)? Definition

The United Arab Emirates dirham, the official currency of Dubai and the other Emirates, is abbreviated as the AED. The symbol Dhs or DH is frequently used. Since 1973, when it replaced various currencies, including the Dubai riyal and the Qatar riyal, the United Arab Emirates Dirham has been in circulation.

Main points to remember about AED

AED fundamentals (United Arab Emirates Dirham)

The dirham is made up of 100 fils in the United Arab Emirates. The dirham is available in the following denominations: 5, 10, 20, 50, 100, 200, 500, and 1,000. The coin denominations are 1, 25, and 50 fils, however it's worth noting that coins worth less than 10 fils are uncommon.

The UAE's banknotes are issued by the Central Bank of the UAE. Several watermarks, including the national emblem on the obverse of each note, are employed to prevent counterfeiting. Any action "deemed an insult" to the national insignia, including counterfeiting, is a serious offence.

The insignia is a golden falcon with a disc in the middle encircled by seven stars and seven feathers, one for each of the seven Emirates.

The UAE's Economy and the AED

In 2019, the United Arab Emirates had a gross domestic output of around $421 billion, placing it 25th on the World Economic Forum's Global Competitiveness Index. With the exception of Dubai, the emirates rely heavily on oil exports and natural gas deposits, while diversification efforts have been ongoing. In terms of currency stability, investors consider the UAE dirham to be one of the world's most stable currencies. Since 1997, it has been tied to the US dollar at a rate of one US dollar to three and a half AED.

Because of the country's reliance on the oil sector, policymakers believe that pegging the currency to the US dollar is favourable. Keep in mind that oil prices are in US dollars. The UAE government can limit the volatility of its exports by pegging its currency against the greenback. To sustain the peg, the country's economic statistics and current account balance should be kept at appropriate levels. For example, the UAE government is operating a current account surplus in relation to its GDP.

However, the peg may also be used to undermine government policy. Oil prices, for example, fell in 2015, reducing income for GCC countries. Many nations debated weakening their currencies in relation to the US dollar. Because US money obtained from oil sales could be repatriated for more dirhams, the depreciation would improve local revenue.

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Learn more about online trading brokers for UAE citizens and residents.

Best Online Brokers for trading Forex, Bitcoin, CFDs and Stocks in the UAE

Here is a list of top online brokers to open an account for trading Forex, Bitcoin, CFDs and Stocks in the UAE. These brokers have above-average reviews on sites like Reddit, Quora and Trustpilot; and are totally legit, safe and trustworthy for UAE citizens and residents.

The brokers listed on this webpage accept clients from within the United Arab Emirates. Most of these companies provide an online trading platform for fiat currencies (such as Pound Sterling, the Euro, the US dollar, Japanese Yen etc.), buying and selling of cryptocurrencies (for example Bitcoin, Ethereum, Tether, XRP etc.), stocks (this includes listings on Abu Dhabi Securities Exchange, Borse Dubai, Dubai Mercantile Exchange, Dubai Financial Market and NASDAQ Dubai), CFDs (Apple, Microsoft, Amazon, Google, Tesla etc.), UAE government and corporate bonds, and short-term to long-term fixed income securities.

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Arpita SinghArpita Singh is the main writer at ForexBroker.ae. As a senior investment professional with 10+ years of experience working at top-tier Private Equity and Sovereign Wealth Fund; she is also responsible for fact-checking concepts, reviews, and related details about brokers and exchanges listed on this website. Full Bio.