Residents rush to exchange houses as sterling sinks

Exchange houses in the UAE are enjoying a surge in business as Brexit wreaks havoc on the British pound.

Some houses yesterday said they had experienced a large increase in volumes of sterling requests or wire transfers over the past two days.

British Prime Minister Theresa May faced a vote of no confidence in Parliament overnight. The news sent the pound plummeting to $1.248 (Dh4.58) at one point during the day, which was among the lowest in months.

The motion came after Mrs May’s decision to delay a parliamentary vote on her unpopular Brexit deal.

But the uncertainty in the UK has a silver lining for dollar-earning British residents and others in the UAE, who can now can send money back home at attractive rates.

Exchange house Al Ansari said it had seen as much as a 20 per cent increase in the past two days compared with last year. Al Ansari did not reveal how much has been transferred. “There is quite a good demand for banknotes and transfers,” said Ali Al Najjar, Al Ansari assistant general manager and head of operations.

“Some customers are planning to travel for Christmas and are now taking advantage of the good rate. The rate is dropping, it is now attractive and they will go and transfer.”

The Foreign Exchange and Remittance Group, a UAE network representing forex business, said it had also seen a rise in remittances over the past two days. But it said that some residents thought the pound could sink even lower.

“We have seen an increase in remittances to the UK in the past two days,” said Rajiv Raipancholia, treasurer of the group. “Due to a 2.5 per cent depreciation in the rate, there is an overall increase in the volumes. I also believe expatriates are anticipating a weaker pound in the coming weeks.”

UAE Exchange said it was also experiencing a rise in interest from customers about sending money to the UK.

Promoth Manghat, group chief executive at UAE Exchange, said it was a tumultuous year for the British pound.

“While the pound has recovered marginally after its sharp slump to a 20-month-low of 1.124 against the dollar, it could be susceptible to volatility in the coming weeks,” Mr Manghat said.

“At UAE Exchange, we are already seeing a rise in the number of queries from customers regarding exchange rates on remittances to the UK.

“As the Brexit scenario continues to unfold, it is prudent for expatriates to keep an eye on the exchange rates to get more value from their transfers.”

Whatever the result overnight, the intractability of the Brexit process seems destined to cause more instability for the British pound.