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21 April 2024

UAE sets up dedicated dollar peg task force

By Agencies




The Central Bank of the UAE, the second-largest Middle East Arab economy, has set up a task force to help implement a possible depegging of the country’s currency from the US dollar, Dow Jones reported yesterday.

The committee is studying the benefits of depegging or revaluing and will help co-ordinate any depeg of the UAE dirham. It is expected to report its findings at the end of the year, people familiar with the matter said.

The year-long timeframe for the group to report its findings will dash the hopes of many currency speculators that have increased bets on the UAE severing its ties with the dollar over the coming months.

Qatar is considering dropping its dollar peg but hopes Gulf Arab nations will act together before making any decision, according to the country’s prime minister.

Speaking at a security conference in Qatar’s capital, Doha, Sheikh Hamad Bin Jassim Bin Jabr Al Thani said a decision on depegging from the dollar was not easy and was under study, the Gulf Times reported.

“I hope the GCC states take a unified position in this matter,” the paper quoted him as saying.

Sheikh Hamad told Reuters in February Qatar’s dollar-pegged riyal is undervalued by as much as 30 per cent and currency revaluation is being studied, among several options, to check inflation.

Inflation in the richest Arab country by per capita hit 13.74 per cent in the fourth quarter.