UAE dirham to remain pegged to dollar: Suwaidi

The UAE will maintain a long-standing peg between its currency the dirham and the US dollar because the greenback is a stable currency, central bank governor Sultan bin Nassir Al Suwaidi was reported on Thursday as saying.

Suwaidi also said a landmark plan to create a common GCC currency is still facing obstacles despite an agreement between four member states.

“The UAE dirham has been and will remained pegged to the US dollar…the dollar is a stable currency and there is no other currency that can compete with it,” Suwaidi told the Saudi Arabic language daily Alriyadh.

He said the UAE had pulled out of the proposed GCC monetary union because some conditions for the project have not been met.

“The components of the monetary union must be complete before we enter this union,” he said. “There are technical and financial problems facing this project…they have not been cleared so we can reach a full agreement…when we can have flexibility in financial and commercial dealing, then we can agree on the common currency.”

The UAE and Oman pulled out of the GCC monetary union a few years ago, leaving Saudi Arabia, Qatar, Kuwait and Bahrain as the only signatories to that pact.