BarakaBits
  • Business
    • Social Entrepreneurship
    • Women-Led Enterprises
    • Youth in Business
  • The Arts
    • Art & Photography
    • Books, Blogs & Poetry
    • Design, Fashion & Architecture
    • Music
    • Theater & Dance
    • TV, Film & Online Video
  • Dailylife
    • Challenge to Change
    • Discovery
    • DIY & Life Hacks
    • Food for Thought
    • Heritage
    • Travel
    • Wellness Inside Out
  • Education
    • #NeverStopLearning
    • Classroom 2.0
    • The VIP Section
  • Environment
    • Green Policy
    • Sustainable Design
    • Upcycling & Recycling
  • Science & Tech
    • Lab to Life
  • #Barakability
    • AMENA
    • Memory Bank
    • Opportunities
    • Portraits
  • Countries
  • Submit a Story
  • About Us
  • Advertise
  • Contact
Subscription Form
BarakaBits
  • Business
    • Social Entrepreneurship
    • Entrepreneurship
    • Women-Led Enterprises
    • Youth in Business
  • The Arts
    • Art & Photography
    • Books, Blogs & Poetry
    • Design, Fashion & Architecture
    • Music
    • Theater & Dance
    • TV, Film & Online Video
  • Dailylife
  • Education
  • Environment
  • Science & Tech
  • #Barakability
  • عربي
  • Business

What Role Does the Forex Market Play in the UAE’s Economy?

  • October 9, 2017
  • No comments
  • 2 minute read
Photo credit: nbad.com
Total
13
Shares
13
0
0
0
0
0

Babe.comThe forex market (or foreign exchange) remains the single largest entity of its type, with an estimated £5 trillion traded during each 24-hour period.

While this highlights the popularity and liquidity of this market, however, it does not offer us an insight into the role that currency and the foreign exchange plays within the global economy.

Similarly, it does not showcase how important the foreign exchange is to a commodity-reliant region such as the United Arab Emirates (UAE), particularly from the perspective of businesses and investors. In this article, we will explore this in further detail and consider the numerous ways in which the foreign exchange impacts on the economy in the UAE:

1. It Creates Flexible and Constant Options for Traders

If you look back at 2016, the UAE was plagued by plunging commodity prices (specifically oil), which in turn triggered huge volatility in the stock market. This took a toll on an economy that relied on the prevailing level of demand for oil, while it also restricted investors and reduced trading volumes as a result.

In a bid to optimise their momentum and capitalise on a changeable, macroeconomic climate, traders flocked in droves to the forex market. This enabled them to trade currencies as derivative options, as they eschewed the burden of ownership and began to profit even in a depreciating market.

This is because online brokers like Ads Prime enable traders to speculate about the future performance of an underlying asset class, allowing them to hedge against specific currency pairings and profit as their values fall.

2. It Allows for International Payments and the Exchange of Currency

On an even more fundamental level, the forex market also plays a pivotal role in facilitating international

trade. This is the heartbeat of the global economy, while it has allowed the UAE to diversify its economic interests in recent times.

For multinational business or global, e-commerce ventures based in the UAE, the foreign exchange enables them to buy relevant currencies in bulk, minimise costs and time their overseas transactions to achieve financial efficiency.

So whether they need to import raw materials from overseas or pay international employees, the forex market allows firms to exchange funds affordably and make timely payments in local currencies.

3. It Underpins the Tourism Sector

As the UAE and major cities like Dubai have evolved, tourism has become an increasingly lucrative element of the Middle Eastern economy.

This sector would not thrive without the foreign exchange or forex market, as this provides an accessible and central entity through which individuals can exchange one international fund for another. Both recreational and business travellers drive a strong demand for a host of overseas currencies, as they monitor the exchange to time their transactions and achieve the best value for money.

The ease with which funds can be transferred helps to support a constant stream of visitors to the UAE, boosting reinvestment into the economy and helping it to reduce its reliance on oil.

13
0
0
0
Share 13
Tweet 0
Total
13
Shares
Share 13
Tweet 0
Pin it 0
Related Topics
  • Business
  • foreign exchange
  • forex
Israa Elkhatib

I was born in Palestine but raised with the fireflies in Georgia. My teenage years were spent being the Muslim nerd who was known as the bookworm of the school. That followed me back to Palestine, to develop into being the girl with the big vocabulary. I spent most of my high-school days cursing Newton for not eating that apple. My English Literature Bachelor's degree was only obtained because I'm a nerd for literature and my minor in Translation pretty much pays the bills, thank you Birzeit University.Creative writing is my passion and reading is my escape from reality into a world where everything is the way you imagine it to be.

Previous Article
  • #Barakability
  • Lifestyle
  • Uncategorized

International Babywearing Week, Promoting the Benefits of Babywearing

  • October 3, 2017
View Post
Next Article
  • The Arts
  • TV, Film & Online Video

Pari Will Be Ready to Scare You on 31 of October 2017

  • October 16, 2017
View Post

Subscribe

Subscribe now to our newsletter

You May Also Like
View Post
  • Business

Six Reasons to Invest in Dubai Property

  • October 12, 2021
View Post
  • Business

How Does a Sharia Mortgage Work?

  • August 4, 2021
View Post
  • Business

3 Must-Haves in a Job Listing Post

  • July 11, 2021
View Post
  • Business

Here’s What The Top Debt Consolidation Companies Have In Common

  • January 24, 2021
View Post
  • Business

Socially Powerful: Global Influencer Agency Taking Over UAE

  • November 18, 2020
View Post
  • Business

The Steps of Identifying the Trading Trend

  • November 10, 2020
View Post
  • Business

Types of Psychometric Tests

  • November 4, 2020
View Post
  • Business

ADCB Hayyak: Your Modern Personal Loan Portal

  • October 16, 2020

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Trending
  • 1
    Six Reasons to Invest in Dubai Property
  • 2
    How Does a Sharia Mortgage Work?
  • 3
    Joining the Healthcare Industry with an Online Degree
  • 4
    3 Must-Haves in a Job Listing Post
  • 5
    5 Reasons Why You Should Buy a Dishwasher
Get some good news to your email

Subscribe

Subscribe now to our newsletter

Countries
Libya Yemen Algeria Jordan United Arab Emirates Turkey Iraq Syria Oman Tunisia Egypt Saudi Arabia Iran Morocco Palestine Lebanon Kuwait QatarBahrain
Stay Connected
Facebook
Twitter
Instagram
YouTube Subscribers
Categories
  • Business
  • The Arts
  • Lifestyle
  • Education
  • Environment
  • #Barakability
Company
  • About Us
  • Archives
  • Intern at BarakaBits
  • Submit a Story
  • Why Advertise With Us?
  • Contact Us
BarakaBits
  • About Us
  • Contact Us
  • Privacy Policy
  • Terms of Service
Good News from the Middle East

Input your search keywords and press Enter.