View of part of the Fujairah Corniche and the Hajar Mountains in the Background

Friday, January 4, 2008

UAE Dirham Appears to Stay Pegged to US Dollar

In a New York Times article (4 January 2008) a decision for the dirham to stay pegged to the US dollar has been announced:

The United Arab Emirates will keep a 30-year link between its currency, the dirham, and the United States dollar, after completing a review of its currency regime, said the central bank governor, Sultan bin Nasser al-Suwaidi, left. “In 12 months I can say to you that the U.A.E. will maintain the peg,” Mr. Suwaidi said. “We have come to the conclusion that the inflation problem does not lie with the peg against the U.S. dollar.” The dirham is fixed to the dollar at 3.6725. “We were studying the causes of inflation, and we came to the conclusion that the causes are not in the dirham/U.S. dollar peg, therefore we need not do anything on that front,” Mr. Suwaidi said.