The United Arab Emirates dirham (AED) has maintained a fixed peg to the United States dollar at 3.6725 dirhams per dollar since November 1980, managed by the Central Bank of the United Arab Emirates established in 1980 in Abu Dhabi. This peg eliminates currency fluctuation risk for travelers holding dollars but means exchange rates with other currencies track dollar movements directly. The dirham divides into 100 fils, though fils coins below 25 have largely disappeared from circulation. Banknotes circulate in denominations of 5, 10, 20, 50, 100, 200, 500, and 1,000 dirhams, with the 500 and 1,000 notes sometimes refused by small vendors and taxis. Coins exist for 25 and 50 fils and 1 dirham.
ATMs operate throughout urban areas in the United Arab Emirates with concentrations in Dubai and Abu Dhabi exceeding one machine per 500 residents in commercial districts. International cards on Visa, Mastercard, and UnionPay networks function at nearly all machines, though American Express card acceptance at ATMs remains limited to specific bank networks including Emirates NBD and Mashreq Bank. Daily withdrawal limits typically range from 2,000 to 5,000 dirhams depending on the issuing bank's settings and the specific ATM network. Transaction fees consist of the local ATM operator's charge, usually 10 to 25 dirhams, plus the foreign bank's international withdrawal fee and any currency conversion markup. Banks including Emirates NBD, First Abu Dhabi Bank, Dubai Islamic Bank, Abu Dhabi Commercial Bank, and Mashreq Bank operate the majority of machines, with multilingual interfaces offering Arabic, English, Hindi, Urdu, and sometimes Chinese.
Currency exchange operates through licensed exchange houses concentrated in commercial areas, malls, and hotels, with companies including Al Ansari Exchange, UAE Exchange, Al Rostamani Exchange, and Wall Street Exchange maintaining hundreds of locations. Exchange houses generally offer better rates than banks for cash transactions, with spreads on major currencies like euros, pounds sterling, and dollars ranging from 1 to 3 percent. Banks provide exchange services during business hours, typically Saturday through Thursday from 8:00 to 14:00, though hours vary by institution and branch. Exchange houses maintain longer hours, often 9:00 to 21:00 in malls and tourist areas. Airport exchange counters charge premiums of 5 to 10 percent above street rates. Many exchange houses now require identification documents for transactions above 2,000 dirhams under anti-money-laundering regulations implemented after 2018.
Credit cards achieve near-universal acceptance at hotels, restaurants, malls, supermarkets, and chain retailers in Dubai and Abu Dhabi, with Visa and Mastercard functioning more reliably than American Express or Diners Club. Smaller establishments, independent restaurants, traditional souqs including the Gold Souk in Dubai and the Central Market in Sharjah, and street food vendors operate primarily on cash. Contactless payment works at most modern point-of-sale terminals with limits typically set at 300 dirhams before PIN entry becomes mandatory. Dynamic currency conversion appears frequently at payment terminals, offering to charge your card in your home currency rather than dirhams; this option invariably applies worse exchange rates than allowing the transaction to process in dirhams through your bank's standard conversion.
Digital payment platforms have expanded rapidly since 2018, with Apple Pay and Google Pay functioning at contactless terminals nationwide. Local systems including Samsung Pay, Beam Wallet developed by Etisalat, and various bank-specific apps operate alongside international platforms. Restaurants and retailers increasingly display QR codes for payment through multiple apps, though cash and cards remain more universally accepted. Careem Pay, the payment wallet from the ride-hailing company acquired by Uber in 2019, functions for transportation, food delivery, and participating merchants. Government services including Dubai's Salik toll system, parking meters managed by municipal authorities, and the Roads and Transport Authority (RTA) increasingly require digital payment or prepaid accounts rather than accepting cash directly.
The United Arab Emirates operates as one of the higher-cost destinations in the Middle East, with Dubai and Abu Dhabi ranked consistently among the top 50 most expensive cities globally by Mercer and EIU cost-of-living surveys. A restaurant meal at a mid-range establishment typically costs 40 to 80 dirhams per person, while international hotel chain properties in Dubai and Abu Dhabi charge 500 to 1,500 dirhams nightly for standard rooms, with significant variations based on season and event schedules. The annual Dubai Shopping Festival from late December through January, the Formula 1 Abu Dhabi Grand Prix weekend in November or December, and major exhibitions at Dubai World Trade Centre create price spikes of 50 to 200 percent for accommodation.
Supermarket prices reflect the import-dependent economy, with most produce, dairy, and packaged goods arriving through Jebel Ali Port in Dubai or Abu Dhabi ports. A liter of milk costs approximately 6 to 8 dirhams, bread ranges from 4 to 7 dirhams per loaf, and bottled water sells for 1 to 2 dirhams per liter in supermarkets versus 5 to 10 dirhams in hotels and tourist sites. Chains including Carrefour, Lulu Hypermarket, Spinneys, Waitrose, and Choithrams maintain locations throughout urban areas. Public transportation costs remain heavily subsidized: Dubai Metro fares range from 3 to 7.50 dirhams depending on distance and class, while Abu Dhabi buses charge 2 to 4 dirhams per trip or operate on prepaid card systems. Taxis in Dubai start at 5 dirhams with approximately 1.96 dirhams per kilometer, while Abu Dhabi taxis begin at 3.50 dirhams with 1.82 dirhams per kilometer during standard hours.
Petroleum subsidies historically kept certain costs below international norms, though the government removed subsidies on gasoline and diesel in August 2015, shifting to monthly price adjustments based on global crude prices. As of 2024, fuel costs approximately 2.60 to 3.20 dirhams per liter depending on grade and monthly pricing. Electricity and water remain subsidized for Emirati citizens but foreigners pay market rates through the Dubai Electricity and Water Authority (DEWA) and Abu Dhabi Distribution Company (ADDC), with connection fees and deposits required for rentals. The value-added tax (VAT) introduced in January 2018 at 5 percent applies to most goods and services, including restaurant meals, hotel stays, and retail purchases, though basic food items, healthcare, and education receive exemptions.
Bargaining functions in traditional souqs, independent shops in older commercial districts, and when purchasing carpets, gold jewelry, spices, textiles, and handicrafts. The Gold Souk in Dubai's Deira district operates primarily on negotiation, with initial asking prices typically 15 to 30 percent above expected final transactions for items priced by weight plus craftsmanship charges. Malls, supermarkets, chain stores, restaurants, hotels, and service providers maintain fixed prices where negotiation does not apply. Gold pricing in the souqs follows the daily international gold rate displayed on boards, with shops charging making fees for craftsmanship that remain negotiable. Spice Souk vendors in Deira and textile merchants in Bur Dubai expect bargaining, often starting negotiations at twice the price they will accept.
Two licensed operators provide mobile telecommunications in the United Arab Emirates: Etisalat by e& established in 1976 and du (EITC) launched in 2007, both majority-owned by government entities. The Telecommunications and Digital Government Regulatory Authority (TDGRA), formerly the Telecommunications Regulatory Authority, oversees both companies and sets regulatory policy. Network coverage reaches 99 percent of populated areas with 4G LTE widely deployed and 5G commercially available in Dubai, Abu Dhabi, and other major cities since 2019. Etisalat launched commercial 5G services in May 2019, while du followed in October 2019, making the United Arab Emirates among the earliest global 5G adopters.