Savings in the time of dollar decline

Q: With the falling dollar's value against major currencies what should expatriates in the UAE do to ensure their savings in dirhams aren't losing more value?
The falling dollar is probably one of the biggest concerns that people are discussing at the moment. With the dirham's interest rates and exchange rate levels tied to the dollar, the fall over the recent years has hit expatriate residents hard.
For people who are sending money home, or are paying for a mortgage or school fees in another currency, the current economic climate is challenging - effectively, people are being forced to stretch their resources further, and there's no sign of a dollar recovery in the near future. Unless your salary and income are rising sufficiently to off-set the fall in the value of your assets, you will have to tighten your belt in the short-term.
It's important not to panic and make rush decisions. We're still privileged to be living and working in one of most dynamic economies in the world today, and the opportunities for advancement are as strong as they have ever been. You need to consider the long-term implications of any decision.
The first potential avenue is to consider moving cash-based assets into higher yielding currencies, such as commodity-related currencies like the Canadian dollar and the Australian dollar. Commodity currencies refer to the currencies of those countries which are heavily involved in the export of raw materials. In the current climate - when commodity prices are high and continuing to rise - they are a good investment opportunity. The Australian dollar, for example, is at an 18-year high, trading at the highest levels since early 1989. All currencies can change in value, however.
Some people believe that investing in real estate within the UAE is also a partial hedge in the current climate. Real estate provides you with an asset that could continue to appreciate in value. Interest rates on mortgages are also likely to continue to go down while the dollar peg is in place. Because of this, buying is becoming more economically attractive than renting. However, you should consider the fact that many other people are investing in property as a hedge, and so prices are rising.
Finally, consider keeping assets in dirhams, rather than US dollars. Economists expect that the dirham will be revalued at some point, meaning that assets in dirhams will also rise. This is an area where many expatriates are hoping for relief in the medium term.
If the dirham is pegged to a basket of currencies, rather than just the dollar, you can anticipate it increasing in value. This is one of the reasons why you should be cautious - if you moved all your assets into another currency before the dirham revalues, you will lose out twice over.
As always, navigating the current challenging economic climate is easier with professional advice. Predicting the changing potential value of different asset investments can be a challenge, so the services of an experienced financial adviser can be helpful. (This is personal opinion of the writer of the article)