A strong and weak currency
The exchange rate is significant to everyone living as an expatriate. Many people living in the UAE send money to other countries. They possibly have financial commitments such as mortgages in their home country.
In July 2014, the UAE to UK exchange rate was 6.2 dirhams = £1.
In December 2016, the rate was 4.5 dirhams = £1.
Imagine an expatriate who sends 5000 dirhams to the UK each month.
In July 2014, this would have been worth £806.45
In December 2016, this would have been worth £1111.11
So the same amount of dirhams was worth £304.66 more in December 2016.
Imagine someone from the UK travelling to the UAE for a holiday. They have £1000 spending money.
In July 2014, this was worth 6,200 dirhams.
In December 2016, this was worth 4,500 dirhams.
The same amount of sterling was worth 1,700 dirhams less in December 2016.
As the exchange rate changes, it benefits people and businesses in one country more than the other. One currency is said to become stronger or weaker, which means it purchases relatively more or less. So when the pound is weaker, like in December 2016, people can buy more sterling using the same amount of AED.