If you are visiting Dubai or recently have moved there you must know at least the basics of the currency used in Dubai. I like the appearance of Dubai currency. I’ve got many one dirham coins saved and at least one bill of every denomination. I find them exotic looking and the coins have a historic feel to them.

Get a hold of a one dirham silver coin and just feel its edges. They will not be straight. Take a close look at the emblems and writings and it appears like every coin is hand crafted. The print on the coin looks like it was handmade.

Ok enough sentimental talk. Dubai shares the same currency that’s used in the rest of the country (as you’d expect), the Arab Emirate Dirham or AED. It’s called Dirham for short and you will see it abbreviated as either Dhs. or Dh.

The dirham has long been pegged (since 1980 I believe) to the US Dollar at Dh. 3.65 per $1. It’s divided into 100 fils (the equivalent of cents). The notes come in denominations of five, ten, twenty, fifty, one hundred, two hundred, five hundred, and one thousand Dirhams. The coins come in one, five, ten, twenty five, and fifty fils and one dirham.

It is extremely rare to find coins with a denomination below 25 fils and so they are not as commonly used. In fact it’s common to not obtain the correct change in markets if you’re using cash to shop. Be careful.

My personal rule is to use credit cards whenever possible. If your credit card works in Dubai (most US issued cards do), use it. MasterCard, Visa and American Express are accepted in most places in Dubai.

Be careful about Discover though. For some reason this card is never accepted anywhere outside the US, at least in my experience. I’ve tried to use Discover both in India and Dubai and it did not work. It does work next door in Canada though lol.

Anyway, you can convert your Dubai currency to any other foreign currencies freely. You could do the exchanges at banks and exchange houses that are everywhere in Dubai. Simply visit any mall and you’ll notice one inside.

I would recommend exchanging your currency at the airport. Unlike most other countries, the Dubai airport is actually a good place to cash in your dollars or anything else for Dirhams. You’ll typically notice better exchange rates compared to other airports.

It’s typically smart to get Dh. 100 prior to leaving the airport for cabs, tips, etc. Speaking of tips, most hotels and restaurants will automatically add the tip change to your bill. I used to think this was smart on the waiter’s part.

However these tips in fact do not go to the poor waiter but rather to the restaurant owner! Thus I typically leave some extra cash on the table after paying my bill with my credit card so that the waiter or hotel maid would get their share of gratuity.

There are plenty of banks everywhere in Dubai. In fact there’s a dedicated street for banks called Bank Street. Guess what you’ll find there? lol a bunch of banks lined up all together.

You could probably notice your bank on that street as most multinational banks have locations throughout Dubai now. They’re closed around noon time for some hours and on Fridays which is the weekly religious holiday in Dubai.

And if you need cash when the bank is closed, you’ll be able to hit the ATM machines that are everywhere in Dubai. For every bank there are most likely 54,562 ATM machines. That was an exaggeration but they are everywhere that it feels like it’s true!

You’ll be able to notice ATM machines in shopping malls, hotels, inside banks and in the newer bus stands. I suggest you always carry some cash with you, especially if you like to purchase in the local markets of Dubai (the souks). If you’ve got cash readily available, you’ll likely get the most effective bargains as you negotiate within the marketplace.

Going back to Dubai currency, the IMF’s Special Drawing Right regulates Dubai’s currency. It’s job is to manage the valuation of Dirham in the global market (though truly it’s based on how the US dollar behaves in relation to other global currencies).

This brings up a fascinating story. When I was in Dubai in December of 2007, there was a lot of speculation that the Dirham was going to be revalued for the first time in over twenty years.

This is because local investors complained their portfolios were hurting because of the devaluation of the US Dollar. Due to the speculation, several exchange houses changed the standard Dh 3.65 per dollar conversion and many individuals lost money exchanging currency during that time.

Fortunately for me I was in a position to buy Dirhams for cheap and found an exchange house where I sold them for more than what I paid for them! This is when I wished I had my entire bank account based in Dubai!

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