UAE’s dependence in the oil sector leads to instability in its economy. To counter this instability, AED is pegged to the US dollar to avoid stark fluctuations in the exchange rate, which directly affects UAE’s economy.
This may have positive and negative implications, but most people are set to face a slightly negative implication in the coming months. The US Federal Reserve’s decision to increase interest rates in the US causes a rise in interest rates in UAE.
Individuals and business may face the heat of higher cost of borrowing money from the bank in the following months with the several expected hikes. This is said to create more pressure on UAE banks, by amplifying liquidity pressures. Banks may have more tasks on their hand in the following months due to regulatory compliance with the IFRS9 and the upcoming VAT in January 2018.
All of this may create additional time lags in achieving your business loans in time. In addition to this, the upcoming VAT is set to increase business costs.
This external factor is set to create alterations to the business environment in UAE. Business will have to take several decisions to manage their costs and maintain profits. We, at MSI Alnoman and Ravi, help you achieve your business goals in these rapidly modifying environments.
This said, keeping up to date with the changes in our community is very important to help improve your business. Changing interest rates, VAT, changes in local markets and industries, and changes in oil prices are very significant factors to pay attention to in order to realize success.