Russians break the exchange rate rules

Bad news for my retail habit, great news for Dubai. Because British tourists are traditionally the lifeblood of not just hotels, but also shops, bars and estate agents.

While the English pound bought only five Dubai dirhams, everything here from villas to vodka seemed exorbitant. Brits stayed away.

Today the pound fetches six dirhams. Suddenly, buying a holiday home after one too many Smirnoffs is back on the agenda.

It's been a similar story for Germans, another "key source market" for Dubai.

As the euro tailed off against the greenback, so too did Munich accents on Dubai beaches. Hoteliers tell me they've started regaining their voice after the euro rallied in May.

All of this plays strictly by the rules of conventional economics. A strong currency is supposed to drive away tourists, while a weak one pulls them in.

The exception that proves the rule: Russians. The rouble fell further and faster against the dollar than anything minted in London or Frankfurt, yet Russian tourists kept coming.

I asked one hotel manager with links to Moscow why that was. He just smiled and said: "The secret of the Russian economy are not to be found in an economics text book"

FOREIGN investors are dipping back into Gulf stock markets, following a torrid year that had them fleeing for the exit.

Figures from the Dubai Financial Market show foreigners were net buyers of stocks, to the tune of about $130 million throughout May. The main Dubai index closed yesterday (Tuesday) at its highest level since October.

Dubai's first budget airline has got off to a strong start, with every seat filled on the inaugural flight to Amman in Jordan. Fly Dubai, owned by Emirates Airline, is competing with established low-cost carriers such as Air Arabia, which has seen profits surge in recent months as the recession bites.