UAE Dirham price today

The UAE dirham price matters more to the Iranian market than the size of the UAE economy would suggest; for years Dubai has been one of the main gateways for Iran's foreign trade, a popular travel destination, and home and workplace to a large community of Iranians. On this page you can see the live price of the dirham in Tehran's open market in Toman, and below we explain why the dirham is almost a shadow of the dollar, what the exact relationship between the two is, and what moves the dirham price in Tehran.

The UAE dirham: a currency pegged to the dollar

The dirham (AED) is the official currency of the United Arab Emirates; it replaced the currencies previously used in the Emirates in 1973, shortly after the country was formed. Each dirham is divided into 100 fils, and its monetary policy is set by the Central Bank of the UAE .

The most important feature of the dirham is its fixed rate against the US dollar . Since 1997 the official exchange rate has been fixed at 3.6725 dirhams per dollar , and in practice roughly the same level has been maintained since the 1980s. The UAE central bank maintains this rate backed by the country's large foreign exchange reserves. For this reason, the dirham shows almost no fluctuation against the dollar in the global market.

This peg has an important consequence for UAE monetary policy: the country's central bank usually moves interest rates in line with the US Federal Reserve so that the fixed rate against the dollar does not come under pressure. Many Persian Gulf countries, such as Saudi Arabia and Qatar, have also pegged their currencies to the dollar in the same way.

The relationship between the dirham and dollar prices in Tehran

Because of this fixed rate, the dirham price in Tehran can be found almost with a simple division: the open-market dollar price divided by 3.6725. In other words, each dollar is worth a little more than 3.5 dirhams, and a dirham is worth roughly a quarter of a dollar.

In practice, the Tehran market rate is not always exactly equal to this calculation. Sometimes demand for dirham remittances for imports rises and the dirham trades slightly above the calculated rate, and sometimes the opposite happens. The gap between the actual dirham price and this calculated figure is itself a sign of the state of trade demand in the market.

Why does the dirham matter to the Iranian market?

1. Trade and imports

The UAE, and Dubai in particular, has for years been one of Iran's largest trading partners and a hub for the "re-export" of goods to Iran. Many goods that reach Iran from China, Europe or elsewhere are supplied via Dubai through trading companies there. For this reason, dirham remittances are one of the most widely used payment tools for Iranian traders.

2. Banking restrictions and sanctions

With Iranian banks' access to the global banking network restricted, part of Iran's foreign currency transfers has been carried out through exchange offices and companies operating in the UAE. Changes in UAE banking rules regarding Iranians or tighter controls on transfers can affect remittance costs and the gap between the dirham and dollar rates.

3. Travel, work and residency

Dubai is one of the closest foreign destinations for Iranians, and there are many flights between the two countries. A large community of Iranians live and work in the UAE, and some go there to register a company, buy property or obtain residency; all of this creates steady demand for the dirham.

4. A benchmark for pricing imported goods

In markets such as mobile phones, home appliances and car parts, where a large share of goods is imported via Dubai, wholesalers know their purchase prices in dirhams. For this reason, changes in the dirham rate in Tehran show up very quickly in the prices of these goods, and some market participants follow the dirham remittance rate more closely than the dollar cash rate.

Factors affecting the dirham price

Because the dirham is pegged to the dollar, almost all the factors that affect the open-market dollar also affect the dirham:

• Inflation and liquidity growth in Iran , which reduce the value of the rial against all currencies;
• Foreign currency revenue and sanctions, especially in oil sales and the repatriation of export earnings;
• Political news and market expectations , which cause short-term volatility;
• The Central Bank of Iran's currency policies and the rules for supplying foreign currency for imports.

Unlike the euro or the pound, global fluctuations of the dirham play almost no role; what separates the dirham from the dollar is only supply and demand specific to the Tehran market, such as traders' demand or new restrictions on money transfers.

Dirham cash or remittance?

• Dirham cash: used for travel and cash expenses, and obtained from licensed exchange offices. The rate on this page is the open-market rate.
• Dirham remittance: used to pay a seller or an account in the UAE, and the most common tool for traders. The remittance rate differs from the cash rate depending on the delivery time and transfer route.
• Dirham in official systems: part of the foreign currency for importing goods is offered in dirhams on the central bank's systems, and its rate differs from the open market.

For travellers going to the UAE, it can be useful to compare the cost of buying dirhams in Tehran with buying dollars and converting them at exchange offices in the UAE, because dollars are converted there easily and at a rate close to the fixed rate.

A few more tips when buying dirhams:

• Prices on this page are in Toman ; each Toman is ten rials.
• Compare the exchange office's buy and sell rates; because each dirham is worth little, a difference of a few dozen Toman in the rate adds up to a significant sum on large amounts.
• Buying and selling currency is subject to the Central Bank of Iran's regulations and should be done through licensed exchange offices.

The dirham alongside other markets

If you want to see the direction of the currency market earlier, the Tether price , which trades around the clock on crypto exchanges, usually moves in line with the dollar and therefore the dirham. To review exchanges before choosing one, see the crypto exchange comparison . The prices of 18-karat gold and the Emami coin are also driven by the same open-market dollar rate, and following these markets together gives a fuller picture. To compare the dirham with the other currency widely used by Iranians in the region, see the Turkish lira price as well; unlike the dirham, which is pegged to the dollar, the lira floats against the dollar, and its trend can be seen in the US dollar to Turkish lira (USD/TRY) pair.

Federal Reserve interest rate decisions, which the UAE central bank usually follows, can be tracked in the Teagle economic calendar , and current rates on the global interest rates page. The list of all currencies can be found in the Iran market currency section .

The information on this page is for informational purposes only and is not a recommendation to buy or sell. Prices are taken from the stated sources and may differ slightly from the rate at your local exchange.