Banking and the Dirham Peg
How the peg works
The Central Bank of the UAE buys dirhams from banks at AED 3.673 per dollar and sells them at AED 3.672, so the market rate stays at the official AED 3.6725.2
Under Decretal Federal Law No. 14 of 2018, the Central Bank must hold foreign reserves equal to at least 70% of the monetary base.2
The Dirham Monetary Framework, introduced in 2017, sets out how the Central Bank manages liquidity and short-term interest rates under the peg.3
While the peg holds, an investor who thinks in US dollars faces no exchange-rate movement on dirham assets. Investors in other currencies are exposed to the dollar.
The banking sector in numbers
| Measure | Figure |
|---|---|
| National banks | 24 |
| Branches of foreign banks | 38 |
| Total bank assets, end of Q2 2026 | AED 5,594 billion, up 12.5% in a year |
| Growth in loans, year on year | 18.1% |
| Growth in deposits, year on year | 14.0% |
Source: Central Bank of the UAE: Quarterly Economic Review, September 20264
| Other licensed institutions, Q1 2026 | Number |
|---|---|
| Wholesale banks | 11 |
| Representative offices of foreign banks | 67 |
| Finance companies | 20 |
| Branches of national banks in the UAE | 453 |
Source: Central Bank of the UAE: Monetary, banking and financial markets developments, Q1 20265
Banks in the financial free zones
Banks and other firms authorised in DIFC are not allowed to take deposits from the UAE domestic market or to deal in dirhams. They serve mainly wholesale and international clients.6
For an everyday company account in dirhams, most investors use a bank licensed by the Central Bank. See the guide to opening a corporate bank account.
Frequently Asked Questions
What is the dirham exchange rate to the US dollar?
The dirham has been pegged at AED 3.6725 to the US dollar since February 2002. The Central Bank buys dirhams at 3.673 and sells them at 3.672.
Sources
- UAE Government Portal: Fact sheet
- Central Bank of the UAE: How the monetary system works
- Central Bank of the UAE: About the Dirham Monetary Framework
- Central Bank of the UAE: Quarterly Economic Review, September 2026
- Central Bank of the UAE: Monetary, banking and financial markets developments, Q1 2026
- DIFC: Laws and regulations
Figures checked 21 October 2026. Prepared by Invest-Emirates.ae for general information. It is not investment, tax or legal advice; please confirm details with a qualified adviser before acting.