UAE dirham hits all-time high against Indian rupee, British pound

Prices of food, groceries to drop by 20%
UAE dirham hits all-time high against Indian rupee, British pound
People walk through a city centre shopping mall in the UAE

The UAE dirham strengthened further to hit an all-time high against the Indian rupee and the British pound. The Indian currency touched a record low of 22.21 while the UK pound fell to 3.85 against the Emirati dirham.

Retailers estimate that the cost of food items and other consumable goods will see a drop of at least 20 percent in the near future as a result of these two factors.

“Due to shortage of containers, freight rates had shot up to $1,100 therefore prices of foods and other goods had gone up substantially for most of the items. But now the rate has come down to $375 per 20ft container and it is expected to go down to $100-$150, thanks to the availability of containers. This will help lower food import costs and other consumer goods in the UAE,” said Dhananjay Datar, chairman, and managing director, Al-Adil Trading.

Moody’s Investors Service said container freight rates are down by 57 percent from their peak in September last year, although they remain about three times as high as in December 2019. “Softening freight rates will help cool supply-side inflation pressure,” it said.

In May, the UAE and India signed the Comprehensive Economic Partnership Agreement (Cepa). The agreement helps encourage trade by reducing custom tariffs by 90 percent and increasing non-oil trade from $45 billion at end of 2021 to $100 billion annually in the next five years.

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