[milktrayman]

Originally Posted by anil

On the subject for forex, I dont think HiFX are taking any risk in the forward rate. They will be getting the forward rate from the market.

You are being quoted a lower exchange (6.7 I think) than the current spot (7.3) becuase of the way the forward contract works.

Without getting too technical, you are agreeing to buy AED for GBP at some time in the future. But, for that time period, you are earing interest on your GBP and the seller is earning interest on the AED. Now, it is not fair that you might make more interest than the seller, so the exchange rate is adjusted so that you both come out even.
Of course, hiFX will be making some commission for arranging the deal for you.

All this becomes interesting when you are on a 15 year payment plan, becuase the currency movements can have a big impact on what you actually pay.

Apart from the USD peg issue, which I dont think will be dropped, there are also the discussions about the single GCC currency in 2010. Do some google searches on the news to see.

Personally, I think a single currency will strenghen the region and result in more investment which would, hopefully, cause property inflation.

Anil,

Have you gone fixed rate for this development?