The UAE dirham (AED) is pegged to the US dollar at a fixed rate of 3.6725, set by the Central Bank of the UAE. In practice, the dirham barely moves against the dollar — so when you convert AED to pounds or euros, your real exchange-rate risk is the dollar pair, not the dirham itself.
The dirham has been pegged to the US dollar at 3.6725 since 1997. That single fact explains most of what you need to know about timing a transfer to or from the UAE, whether you are sending salary home, buying property or moving a large sum.
Why is the dirham pegged to the US dollar?
The UAE’s economy is closely tied to oil, which is priced and traded in US dollars. Pegging the dirham to the dollar gives exporters, importers and investors a stable, predictable exchange rate against the currency that dominates the UAE’s trade. The Central Bank of the UAE maintains the peg by managing dirham liquidity and reserves.
Several Gulf currencies use a similar approach for the same reason. The trade-off is that the UAE effectively imports US monetary conditions: when the US Federal Reserve moves interest rates, that feeds through to the dirham more than anything happening domestically.
How does the peg work in practice?
Because AED is fixed to the dollar, the dirham does not float freely the way the pound or the euro does. AED/USD stays at or very close to 3.6725 day to day. What moves is the dirham’s value against other currencies — and that movement comes entirely from how the dollar itself moves.
So GBP/AED is, in effect, GBP/USD wearing a different label. If the pound rises against the dollar, it rises against the dirham by almost exactly the same amount. The same is true for EUR/AED and the euro–dollar rate.
When does the peg matter for international transfers?
It matters every time you convert dirhams to another currency. If you are moving money between the UK and the UAE, the rate you get on an AED-to-GBP transfer or a GBP-to-AED transfer is driven by GBP/USD — which moves with the gap between the Bank of England Bank Rate (3.75% as of June 2026) and the US Federal Reserve.
This is why “waiting for the dirham to move” is the wrong frame. The dirham will not move against the dollar; the pound will. For a large or deadline-driven transfer, that is exactly when fixing the rate with a forward contract is worth considering, rather than hoping the dollar pair lands in your favour.
“Most people sending money to or from the UAE watch GBP/AED, but because the dirham is fixed to the dollar, they are really exposed to GBP/USD. Understanding that one fact changes how you time a transfer,” says Anthony Bull, CEO of Cambridge Currencies.
Related concepts and guides
If you are planning a transfer, it helps to compare dirham rates, weigh up the best time to convert AED to GBP, and read our guide to large UK–UAE transfers. For everyday moves, see how to send money from the UAE to the UK.
Frequently asked questions
What is the UAE dirham pegged to?
The UAE dirham is pegged to the US dollar at a fixed rate of 3.6725, set by the Central Bank of the UAE.
What is the AED to USD rate?
The dirham is fixed at 3.6725 to the US dollar and has been since 1997, so AED/USD stays at or very close to that rate.
Why is the dirham pegged to the dollar?
The UAE’s trade, especially oil, is priced in US dollars. Pegging to the dollar gives a stable exchange rate against the currency that dominates the economy.
Does the dirham peg ever change?
The peg has held at 3.6725 since 1997 and is a long-standing policy of the Central Bank of the UAE. Any change would be a major policy decision rather than a daily market move.
How does the peg affect AED to GBP transfers?
Because the dirham is fixed to the dollar, your AED-to-GBP rate moves with GBP/USD — the pound against the dollar — not with the dirham itself.
Is the dirham a stable currency?
Against the US dollar, yes — the peg keeps it stable. Against other currencies it moves only as much as the dollar does.
Transferring to or from the UAE? Speak to a specialist
If you are moving money between the UK and the UAE and want to time it well, speak to a Cambridge Currencies specialist or request a quote. Cambridge Currencies arranges transfers through FCA-authorised partners Currencycloud (FRN 900199) and ScioPay (FRN 927951), by phone with a dedicated dealer.
