Saturday 27 / April / 2024
Muscat: Tourists from Oman to the UK, as well as remittances from the Sultanate back to Britain, are expected to rise as the pound sterling (GBP) is tipped to fall in value again in the aftermath of Brexit, analysts say.
British Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty on Wednesday, which formally began Britain’s exit proceedings from the European Union (EU).
The pound, which fell to a 31 year-low on account of the Brexit vote last year, is expected to continue falling, owing to a slowing economy during a period of high uncertainty, thereby boosting tourism to the country.
“The currency issue is the biggest, apart from changes to be made in rules and regulations. We are expecting the pound to fall in the coming months because so many rules and regulations are expected to be changed. Traffic to the United Kingdom from Oman will certainly rise due to this,” Loai Bataineh, chief executive officer of Ubhar Capital, said.
“British nationals living in Oman will be expected to make more trips back home and probably invest more in the country as remittance rates are higher. Recent measures by Oman Air to launch flights to Manchester and Heathrow are also likely to fuel the movement too. I think a lot of tourism is expected between U.K. and Oman,” he added.
Although the pound survived a large depreciation versus the Omani rial, pegged to the U.S. dollar, following the official Brexit announcement due to the drop in the U.S. dollar, tough negotiations between Britain and the EU over trade agreements are poised to pull down the pound.
One Omani rial could be exchanged for GBP2.09 as of the end of March, up from GBP2.07 a month ago. It still remains below a three decade-low of GBP2.16 in the middle of January.
“I think this can be a good opportunity for British expats that are looking to invest in the U.K. or travel back home, to do it more regularly. I think getting more for the money they earn here is a very important factor,” Eva Stanley Jones, a British expat, said.
Travel and remittances to the U.K. have soared by up to 40 per cent since British voters decided to leave the EU, according to industry experts, and this trend is likely to continue.
“We have already seen a rise in the number of people travelling to Britain last year after Brexit was voted for due to the fall in currency. We are expecting the same this year, especially from British expats. They will surely make more trips back to the country,” an official at a leading travel agency stated.
Meanwhile, Prabash Kumar Subudhi, general manager at the Mustafa Sultan Exchange, said that although remittances to the U.K. have been at the highest levels last year, the market has already factored Brexit and an impact on currency is unlikely.
“There was a huge demand for the pound last year after the Brexit vote, but this year it has become stable. I think most of the variables have already been factored in by the fall last year. We don’t expect any big changes now,” he said.
