The currency is the United Arab Emirates dirham (AED, local abbreviation dhs). Conversion rates are 3.67 AED for 1 USD, 4.89 AED for 1 EUR and 5.68 AED for 1 GBP. The Dirham is pegged to the USD, so rate variations with this currency are unlikely. Notes are in denominations of 5, 10, 20, 50, 100, 200, 500, and 1,000 dirhams. There is a one dirham coin with sub-units of 25 and 50 fils coins (100 fils = 1 dirham). There are 5 fils and 10 fils coins but these are rarely seen (and provide an excuse for traders to 'short change').
Cash and travellers' cheques can be changed at exchanges located at the airports or in all the major shopping malls. ATMs are numerous and generously distributed. They accept all the major chain cards: Visa, Cirrus, Maestro etc. Credit cards are widely accepted.
If you pay with an overseas credit card, most merchants will attempt to apply dynamic currency conversion, charging several percent more than the issuer conversion would have cost. The credit card terminal will offer the choice of whether the conversion should be accepted. The merchant will not ask you about this, and will choose to accept the conversion. If you pay attention, you can intervene and ask for "No" to be answered. If you ask upfront, some merchants will have no idea what you mean, but many will.
Basic commodities used to be cheaper than in most western countries, although this is changing rapidly (Dubai has moved up the ranking to be the 25th most expensive city to live in; Abu Dhabi is close behind). Hotels rates are not cheap--there is a shortage of hotel rooms available, especially in Dubai and Abu Dhabi, which keeps the hotels often at above 90% occupancy. Vast numbers of new hotels are scheduled to come on line during the next five to ten years, but as tourism is on the rise, it is unlikely that prices will come down. All things touristy also tend to be rather expensive. Rents in Dubai are starting to compete with cities like Paris or London, and other prices tend to follow. Some places have shared accommodations available and are quite reasonable.
One of the things the UAE is most famous for is shopping. There are no sales taxes in the UAE, but it is very difficult to find any real bargains anymore as inflation is at an all-time high. If you are interested in shopping, you can't leave the UAE without visiting Dubai. Dubai boasts the best places for shopping in the whole of the Middle East, especially during the annual shopping festival, usually from mid-January to mid-February.
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