What Currency Is AED?

What currency is AED?

If you’ve seen prices listed in AED while browsing international websites, booking travel to Dubai, or making business payments, you may be wondering what it stands for. This guide is written for travellers, importers, investors, and international shoppers who want a clear understanding of AED, where it’s used, and how to manage it effectively. We’ll cover what AED means, how the currency works, and tips for handling it in real-world transactions.

AED: United Arab Emirates Dirham

AED stands for the United Arab Emirates Dirham, the official currency of the UAE. It is abbreviated as AED (based on the ISO 4217 currency code), and commonly represented with the symbol د.إ in Arabic or Dhs/Dh in English contexts.

• Currency name: Dirham

• Currency code: AED

• Symbol: د.إ or Dh

• Subunits: 1 dirham = 100 fils

The dirham has been in circulation since 1973 and is the only legal tender across the UAE, including Dubai, Abu Dhabi, Sharjah, and the other four emirates.

Coins and banknotes in circulation

• Coins: 1, 5, 10, 25, and 50 fils; 1 dirham

• Banknotes: AED 5, 10, 20, 50, 100, 200, 500, and 1,000

Banknotes feature images of UAE landmarks, architecture, and national symbols. The Central Bank of the UAE issues and regulates the currency.

Where AED is used

AED is used across all seven emirates of the United Arab Emirates:

• Abu Dhabi

• Dubai

• Sharjah

• Ajman

• Fujairah

• Ras Al Khaimah

• Umm Al Quwain

The dirham is also accepted in some border areas with Oman and Saudi Arabia, although these countries have their own currencies (the Omani rial and Saudi riyal, respectively).

How the AED works

The United Arab Emirates Dirham is a pegged currency, meaning its exchange rate is fixed to the US dollar. Since the 1990s, the official rate has been maintained at:

• 1 USD = 3.6725 AED

This peg ensures currency stability, which is particularly important for trade, tourism, and investment in the Gulf region. While the rate is fixed, small differences may appear depending on the exchange method (cash, bank transfer, card transactions).

Benefits and considerations of using AED

Advantages:

• Stable exchange rate: Pegged to the US dollar, making it predictable for international transactions.

• Widely used regionally: AED is familiar to travellers and traders across the Middle East and South Asia.

• Modern banking infrastructure: The UAE has advanced digital payment systems, including widespread card and mobile payment acceptance.

Considerations:

• Not freely traded globally: AED may be difficult to obtain or exchange outside the UAE.

• Small coin denominations are rarely used and may be rounded in shops.

• Exchange rate mark-ups may apply when paying by card in foreign currencies.

Common misconceptions

A frequent misunderstanding is that Dubai has its own currency. In fact, all seven emirates—including Dubai—use the same national currency: the UAE dirham (AED).

Another myth is that the exchange rate fluctuates like other global currencies. Due to its peg to the US dollar, the AED is highly stable and doesn’t fluctuate daily like free-floating currencies.

Tips for managing AED when travelling or trading

• Use local ATMs for competitive exchange rates if you're visiting the UAE—ATMs are widely available and reliable.

• Avoid dynamic currency conversion when paying by card—choose to pay in AED to get a better rate.

• Carry small notes and coins for taxis, tips, and small vendors—though cards are widely accepted in urban areas.

• Convert any leftover AED before leaving the UAE, as many countries will not exchange dirhams outside the region.

FAQs

Can I use US dollars or other currencies in the UAE?
Some tourist areas and luxury shops may quote prices in USD, but payment must be made in AED. Foreign currencies are not legal tender.

Is AED used outside the UAE?
Not officially. The AED is accepted only within the UAE. It is not a global currency like USD or EUR.

Can I exchange AED in the UK or US?
AED can be exchanged in major cities, but rates are often less competitive than exchanging locally within the UAE.

Is tipping expected in AED?
Tipping is common but not mandatory. A 5–10% tip is appreciated in restaurants, taxis, and hotels.

Real-life example

A traveller from the UK visits Abu Dhabi with £600. They use a travel debit card to withdraw AED 2,500 from a bank ATM, avoiding airport exchange kiosks. They use cash for markets and taxis, and card for hotels and shopping. By always choosing to pay in AED at card terminals, they avoid inflated exchange rates and manage their spending effectively.