If you’re going from Oman to the UK, you could benefit from cheaper currency

 People in Oman who plan on visiting the UK in the coming days will now be able to get more Pounds Sterling for their Omani Rials, after the currency slipped to a 28-month low following the announcement of Boris Johnson as Prime Minister.

Exchange houses in Oman are offering rates of about £2.12 per Omani Rial, but the rates are so volatile and unpredictable that it could change frequently.

PK Subudhi, the general manager for Mustafa Sultan exchange house in Oman, said: “The pound is at its lowest it has been for some time now, one Omani Rial will now get you £2.127. This is basically due to the uncertainty around Brexit. Just a week ago, the exchange rate was £2.06. If we were to compare it to the US dollar, one dollar was £0.79 a week ago, now it is £0.83.”

“We get many tourists from overseas who come here and want to exchange their British Pounds for Omani Rials, and people from Oman also make plans to visit the UK, so they also ask for Sterling. Those who exchange Omani Rials or US Dollars for Pounds Sterling can now enjoy a cheaper vacation in London or wherever else in the UK they are going, because when you exchange Omani Rials, you are now getting more Pounds.”

In addition to the weakening Pound, the US Dollar was also gaining strength, further influencing the exchange rate between the two currencies, as well as those currencies that were pegged to the greenback.

Subudhi said: “There are two major reasons for this. Concerns over Brexit being a no-deal Brexit are putting a lot of pressure on the Pound, while the Dollar has also strengthened against other major currencies. The US Federal Reserve will also cut rates so it means there are going to be lower interest rates.

“If rates are cut, organisations like the Federal Reserve are the bankers to the bankers,” he added. “This indicates that interest rates will come down. This will spur growth, because whenever interest rates are cut, it means getting funds will be cheaper. If this rate is cheaper, this will be passed on to the customers. Let us say you go for a housing loan, if rates are cut, that will benefit you because the interest rate is lower.”

Commenting on how the Pound would behave over the coming weeks, Subudhi said, “It is very difficult, because it all depends on how Brexit will take place. The new incumbent PM has already given a deadline, so how this goes and how their Brexit deal is approved will determine the fate of the Pound. I don’t think the British Prime Minister himself can predict this.”