The AED is pegged to the USD at 3.6725.
A short reference on the UAE Dirham fixed peg to the US Dollar. The policy, the history, the numbers, and why it matters for every AED conversion.
The UAE Dirham (AED) is pegged to the US Dollar (USD) at a fixed rate of 3.6725 AED per USD, set by the UAE Central Bank in 1997 and maintained without devaluation since. The peg is one-way only: 1 USD always equals 3.6725 AED. The reverse rate (1 AED equals 0.27225 USD) follows arithmetically.
The numbers
| 1 USD | = 3.6725 AED (official, fixed) |
| 1 AED | = 0.272294 USD (1 / 3.6725) |
| 100 USD | = 367.25 AED |
| 100 AED | = 27.2294 USD |
| 1,000 USD | = 3,672.50 AED |
| 1,000 AED | = 272.29 USD |
UAE banks and remittance houses add their own buy and sell spread on top of the peg. Typical retail spread is 0.005 to 0.02 AED per USD around the 3.6725 reference.
How the peg works mechanically
The UAE Central Bank (CBUAE) maintains the peg by standing ready to buy or sell USD against AED at the fixed rate, in unlimited size. When demand for AED is high (for example, when UAE oil exports earn USD that get converted to AED), the central bank prints AED and buys USD at 3.6725. When demand for USD is high (for example, when UAE importers buy abroad), the central bank sells USD from reserves and absorbs AED at 3.6725.
The mechanism requires the CBUAE to hold enough USD reserves to defend the peg in any conceivable scenario. As of 2026 the CBUAE holds roughly USD 200 billion in foreign reserves, well above the level needed to defend a peg at current AED money supply.
Why the UAE maintains the peg
- Oil revenue is dollar-denominated. A stable AED-USD rate removes FX risk from the largest revenue stream of the UAE economy.
- Trade and investment certainty. Companies pricing in AED can budget without worrying about exchange-rate volatility, which encourages foreign investment.
- Inflation anchor. The peg imports US monetary discipline. UAE inflation tracks US inflation closely, which has kept long-run UAE inflation manageable.
- Regional convention. Saudi Arabia, Bahrain, Oman, Qatar all peg to the USD. A common GCC anchor simplifies cross-border trade.
- Reputational signal. Defending a peg for 28 years signals policy credibility, which lowers the cost of UAE government borrowing.
What the peg means for you in practice
- AED-USD never moves. Whether you check today, tomorrow or in five years, the official rate is 3.6725. This has held without devaluation since 1997.
- AED-other-currency does move. Because AED is fixed to USD, AED-EUR moves with USD-EUR, AED-INR moves with USD-INR, AED-GBP moves with USD-GBP. Always.
- Travel. If you travel to the US, your AED card buys USD at very close to 3.6725 (plus the bank or card spread). Predictable.
- Salary in AED. Expats earning AED but planning to remit to USD-denominated savings (US accounts, US property) are effectively earning in USD with a constant 0.27225 conversion. No FX timing matters.
- Mortgage and asset purchases. UAE property and mortgages in AED behave like USD assets for global investors who think in USD.
- Gold and other USD commodities. Gold (XAU) is priced in USD globally. Because AED is fixed to USD, AED gold prices track international gold one-to-one with no FX risk.
Frequently asked questions
The current 3.6725 peg has been in place since 1997. The UAE Dirham was originally pegged to the IMF Special Drawing Rights (SDR) from its introduction in 1973, then switched to a USD peg in 1978, and the 3.6725 level was set in 1997.
Periodically debated, particularly when the USD weakens sharply or when GCC economies diversify away from oil. There is no active policy to unpeg as of 2026. The CBUAE has repeatedly reaffirmed the peg.
The official rate is exactly 3.6725. Retail banks and remittance houses add a buy and sell spread, typically a few hundredths of an AED per USD. The interbank rate is at the peg itself.
AED-EUR, AED-INR, AED-GBP and all other crosses float, because they are computed via the USD. The AED-USD anchor is fixed; the second leg is the float.
Roughly USD 200 billion as of 2026. The reserves cover several years of imports and many multiples of the AED money supply, far exceeding any plausible defence requirement.
Live AED conversion
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