British pound surge impacts remittances of UAE's richest

Theresa May’s surprise election call has started to impact remittance from UAE’s high net worth individuals

Promoth Manghat, chief executive officer, UAE Exchange

Promoth Manghat, chief executive officer, UAE Exchange

The surge in British pound after Prime Minister Theresa May’s surprise election call has started to impact remittance from UAE’s high net worth individuals (HNWI) and corporates to the UK, a senior UAE Exchange official has said.

The sterling hit $1.2876 against the dollar on Tuesday - its highest level since early October 2016. The currency remained steady at the same level on Wednesday.

“Since the pound touched 1.2860 - its highest level - against the US dollar, we are witnessing an adverse effect on HWNI investments and corporate remittances,” Promoth Manghat, chief executive officer, UAE Exchange, told Arabian Business.

Though no daily or monthly remittance figure was given, Manghat said remittances for family maintenance remained steady, despite the currency fluctuation.

Emiratis and UAE companies have been investing in UK’s property market, snapping up trophy’s assets in London.

Separately, in a note to its clients, Deutsche Bank AG termed May’s announcement of a snap election a “game-changer” for both the UK’s Brexit negotiations and sterling.

The German banking group said though it remained structurally bearish on sterling for the past two years, but is now changing its view.

“We are closing out all our bearish forex trades. We intend to review our sterling forecasts in coming days,” it added.

In December,  addressing the 37th GCC Summit in Manama, May said her government was firm on building a strong relationship with the Gulf states with bilateral trade having crossed over £30 billion in 2015.

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