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Official: UAE to maintain
dollar-peg policy
Xinhua
Tuesday, April 8, 2008
A top financial official of the United Arab Emirates (UAE) will
maintain its current policy to peg its currency dirham to U.S.
dollar and will not revise the dirham-dollar exchange rate, local
newspaper Gulf News reported on Tuesday.
"We have no intention whatsoever to depart from the peg
or to revalue the currency in any manner," said Sultan Bin
Nasser Al Suwaidi, governor of the UAE Central Bank.
"Looking into history, the dollar has been appreciating
for about ten years from 1992 to 2002, and we maintained the peg
throughout, and now it has been depreciating since 2004 for only
about three and a half years, and it can rise again," he
added.
(Article continues below)
A study by the UAE Central Bank on the relationship between
the money supply and inflation over the past 25 years showed that
"the correlation is very weak indeed, where we had periods
of increasing liquidity and contracting inflation rates, and vice
versa," he said.
"Hence we will not change our policies according to short-term
currency fluctuations," Suwaidi stressed.
Governors of central banks of the Gulf Cooperation Council (GCC)
agreed in Doha Sunday to maintain the peg to dollar and to continue
striving toward the GCC common currency by Oct. 20, 2010.
Full
article here.
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