Dubai: The world is still coming to terms with the news that Britain has historically voted to leave the EU after 43 years of membership. There is outrage, there is rejoice; but through all the emotion we need to look at the hard facts and determine, what does this actually mean for UAE expats?
The view from our end is to keep calm, and wait and watch for the next couple of weeks’ price action to unfold. Especially for expats earning in dirhams (which is pegged to the dollar) it’s a benefit in many ways. A cheaper pound helps to repatriate higher amounts instantly. It is true that a cheapening currency will bring inflation, but the ill-effects of inflation take time to materialise whilst the currency exchange gain is immediate.
Next comes pension transfers which will be at all-time high levels due to the ultra-low interest rates warranted by Mark Carney in his post-Brexit speech. Low interest rates, when used as the discounting rate, will ensure higher transfer values. Thus it is imperative for expats with pensions back in the UK to think of moving them to an offshore vehicle now.
