Expert urges change in Saudi dollar peg
By Mariam Al Hakeem, Correspondent
Published: July 01, 2007, 00:35
Riyadh: A top Saudi financial analyst has said he is surprised by the Gulf Cooperation Council (GCC) states in general and Saudi Arabia in particular continuing to peg their currencies to the falling US dollar.
The dollar's declining value against major currencies has been blamed for contributing to imported inflation in the Gulf countries.
"The question is what are the real reasons for continuing the same policies for a long period of time without any changes or amendments?" Mohammad Bin Abdullah Al Suwayed asked in published remarks.
In May, Kuwait decided to delink its currency from the dollar, while other GCC central banks insist they will continue to peg their currencies to the dollar until they achieve monetary union in 2010.
"Pegging the Saudi riyal with the dollar is not a sacred matter that cannot be changed. It is a legacy of previous eras when the government was the official sponsor and supervisor of the country's economic development, which requires maintaining continuing financing from the oil revenues generated in dollars," Al Suwayed noted.
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http://archive.gulfnews.com/articles/07/07/01/10136001.html/div>
Forex - Rising Kuwaiti Dinar raises stakes for other Gulf states
07.25.07
Kuwait's decision to allow its currency to appreciate against the dollar for the second time in a month has led to renewed speculation that other Gulf oil producing nations will follow suit.
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They added that a wide-spread de-peg from the dollar in the region, which has 1.6 trln usd under administration, would singificantly reduce commercial demand for the US currency.
http://www.forbes.com/markets/feeds/afx/2007/07/25/afx3949271.htmlUAE May End Dollar Peg Next
Tuesday, June 5, 2007 9:58 a.m. EDT
One day after Syria announced it intended to discontinue using the U.S. dollar peg in July and instead link its currency to the International Monetary Fund’s Special Drawing Right (SDR), indications from trading in currency forwards hint that the United Arab Emirates may be the next Middle Eastern country to stop pegging its exchange rate to the U.S. dollar.
A leading news source said the second-largest Arab economy may follow Syria and Kuwait, which both said in the past two weeks they planned to dump the dollar peg to curb rising import costs and inflation.
One expert said the market expects that the U.A.E. dirham is the most likely of the Gulf countries to follow.
"Forwards show what the market is betting on,” she was quoted as saying.
http://www.newsmax.com/money/archives/st/2007/6/5/95910.cfmSyriaTimes
economy
26-6-2007
The UAE will not drop its currency peg to the US dollar without other Gulf nations doing the same, the country`s central bank governor said Sunday.
Six countries in the GCC are planning a single currency by 2010. However, this deadline is in doubt after Oman said it would not meet the target.
The GCC countries had agreed to keep their currencies pegged to the dollar in the run-up to 2010. But markets have been betting the dollar`s decline would tempt some Gulf states to change dollar-pegged exchange rates, especially after Kuwait broke ranks and adopted a currency basket in May.
"Give me a certificate, I will sign it. For the UAE I can say comfortably and surely that we will not move alone and we will move with other GCC countries. We will all be together in it. No, we are not ruling out, but we will have to move together," Central Bank Governor Sultan Bin Nasser Al Suwaidi said.
http://syriatimes.tishreen.info/_economy.asp?FileName=99930460220070626095832
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