The Governor of the Central Bank of the UAE emphasised on Saturday evening that the recent media reports regarding a study on the dirham’s peg to the US dollar are not true.
He further reiterated in a statement that fixing and safeguarding the official exchange rate of the dirham falls by law within the purview of the Central Bank’s Board of Directors, and that the policy of the fixed peg of the dirham against the US dollar will remain in place.
It should be noted in this regard that the national economic indicators strongly support the continuation of the fixed peg regime. This exchange rate policy has contributed to maintaining economic stability and bolstering investors’ confidence over the long period it has been in effect.
The UAE dirham fell to its lowest against the US dollar in more than a year in the one-year forwards market on Thursday, as speculation grew that slumping oil prices would lead Gulf states to ditch their currency pegs to the dollar.
One-year dollar/dirham forwards rose eight points, pricing the dirham around 3.673/3.674 in a year's time and implying depreciation from the 3.67 spot rate.
The dirham is pegged to the dollar at 3.6725 and is trading in the spot market at 3.6730.
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