Russia's reorientation of foreign trade towards the East may boost demand for UAE dirhams in Russia, Vladimir Evstifeyev, head of Zenit Bank's analytical department, told TASS.
"The advantage of the dirham is that it is actually an exposure to the US dollar only without sanctions risks. The exchange rate of the dirham against the dollar has been maintained artificially for many years, and its stability is ensured by the potential of the UAE economy. With the reorientation of foreign trade to the East, relations between Russia and the UAE will become closer. It is possible that the UAE could become one of the main hubs for building parallel imports. This will increase the demand for dirhams in Russia," said Evstifeyev.
The expert also said that the UAE dirham, like the Hong Kong dollar, is directly tied to the US dollar, i.e. copies its dynamics with a certain ratio. However, the demand for dirhams in Russia is just emerging. It is necessary to create an accessible infrastructure for making investments and getting income on investments in this currency.
"As part of diversification, this currency may be of interest with a view to future development opportunities," adds Evstifeyev. According to the expert, with oil price of $75-85 per barrel the dirham may go up in price to 17-18 rubles by the end of the year, with the price of oil at $ 10 lower - 18-20 rubles.
"Since this currency in our list is not the most popular, its share at the initial stage should be about 5-10%, and with the development of the payment infrastructure, you can gradually increase its share to 15-20%," Evstifeyev advised. He also added that the prospect of the dirham becoming an analogue of the dollar and the euro on a global scale tends to zero. Nevertheless, in his opinion, taking into consideration Russian specifics, the dirham has all chances to become as popular as dollar and euro.
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Based on materials from TASS