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UAE central bank warns exchange bureaus

DUBAI — Foreign exchange bureaus and hotels in the UAE yesterday heeded the central bank’s directive to go back to the old dollar-dirham rate as the country has no intention to revalue its currency.

The central bank said it would impose “severe penalties” on money changers buying dollars at lower rates and promised to use funds deposited by the exchange centres to repay overcharged customers.

Exchange centres and hotels revised their rates on Saturday and Sunday, buying a dollar at Dh3.50-3.10, fearful of losing money if the Gulf leaders announced currencies revaluation in the Doha summit, which opened yesterday.

There has been a growing speculation that the Gulf states would abandon the dollar-peg, which dictates a rate of Dh3.67 per dollar, and move to a currency basket because of the weakening greenback.

Meanwhile, analysts noted that while there was a correction of the dollar-dirham exchange rates, those of the euro and pound sterling have widened significantly since Saturday.

An official at Al Rostamani International Exchange denied the company had revised its buying rate of Dh3.65 per dollar, saying it would only do so upon instruction from the central bank.

However, a call to Al Rostamani’s branch at Ibn Battuta Mall indicated that it indeed revised its rates to Dh3.4 per dollar on Saturday and Sunday, and brought it back yesterday to Friday’s rate of Dh3.65.

Shangri-La Hotel, on Shaikh Zayed Road, was buying a dollar yesterday for Dh3.675 as against its Sunday’s rate of Dh3.35.

A hotel official said the rates were adjusted based on the dictates of the market.

An official of Al Fardan Exchange also invoked the same market trends saying the bureau was offering Dh3.60 for a dollar yesterday and Dh3.35 on Sunday.

Wahid Taheri, manager of Al Ansari Exchange in Karama, said the bureau was not aware of any directive from the UAE central bank to go back to the old rates.