Qatar criticises Merrill Lynch report on depeg

Yusuf Kamal denies that the country will depeg in six months. (AFP)

Qatar yesterday criticised the US bank Merrill Lynch over its recent report that the Gulf country could soon depeg its currency from the dollar.

Qatari Finance Minister Yusuf Kamal was asked by local reporters after a GCC trade meeting in Doha about this month's report by Merrill Lynch, which expected Qatar and the UAE to end the peg with the US dollar within six months.

"This report is completely untrue and baseless," the Minister said after the meeting of the GCC co-operation meeting. Another Qatari official said his government needs to read good financial analysis reports by Merrill Lynch and other global institutions.

But Abdullah Al Qahtani, Ministry of Economy and Trade Under-Secretary added: "Ending the peg between our currency and the US dollar is a sovereign decision that should be taken only by the Qatari Government… It is good to read such reports but this issue is up to the state of Qatar not an independent institution like Merrill Lynch… the green light comes from Qatar not from the United States, hence we can decide when and where we move our currency… any way, such a decision is up to the Central Bank of Qatar."

The UAE has not reacted to the report by Merrill Lynch, one of the world's leading financial management organisations.

But Central Bank Governor Sultan bin Nassir Al Suweidi has repeatedly ruled out quitting the dollar at present.

A GCC official said this week a decision by member states to end a long-standing link between local currencies and the ailing dollar could be taken after the creation of the monetary union, which is planned for 2010.