Yes, it happened. The divorce of the century: Brexit.
The United Kingdom’s historic decision to leave the European Union has triggered panic in and shocked global markets as the sterling fell to its lowest value since before 1985. The sterling tumbled, the Prime Minister announced that he will step down and the UK’s FTSE 100 stock index lost 3 percent of its value that day.
Own a business in the UAE and wondering how you might be affected as a result of Britain’s shocking exit from the EU?
There’s no need for immediate panic for Brits in the UAE. But, we won’t blame you for feeling jittery, so with no further ado, here are some of the immediate consequences of Brexit for the UAE:
- Now would be a good time to change your dirhams to pounds
If you are an expat sending money to the UK, you will need less dirhams for the same amount of sterling.
- Home trips may become cheaper
Get more bang for your buck when exchanging holiday money or booking hotel stays in pound. Consequently, this is likely to make visiting the UAE for people in Britain more expensive, given the dwindling sterling.
- Don’t panic if you’ve got investments in the United Kingdom
Instead, now would be a good time to expand your investment portfolio, especially real estate. Consider dipping a toe into London’s property market, as London residential property is now cheaper for international buyers looking to enter the market
- You won’t be affected if you have a Schengan visa
The UK is not party to the Schengan Agreement.
- Looking to pick up a Bentley or Aston Martin?
Then, smile. Imports from the UK are likely to become cheaper as the UAE imports a lot of luxury cars.
The good news is that there has been limited interconnectedness between the UAE and UK financial systems. The UAE dirham is pegged to the US dollar and there are only few areas through which instability of and uncertainty about future UK and EU relations could affect the UAE economy. So, business-wise, the UAE seems quite well-equipped to handle the Brexit shock.
Every change brings with it opportunity as well as challenges. No one knows quite how this will all pan out, so brace yourself.
And remember the popular British meme: