Putting all speculations to rest, UAE Central Bank Governor HE Sultan bin Nasser Al Suweidi said on Thursday that there is no plan 'for the time being' to revaluate Dirham against US Dollar.
He also denied recent reports suggesting that the UAE central bank has set up a currency task force to study a possible revaluation of the Dirham against the Dollar.
"Such a task force doesn't exist at all", Al Ittihad Arabic daily quoted the Governor as saying.
UAE's currency is pegged to US Dollar on a fixed rate of 1USD=3.67 Dirham since the early 1980s.
On some unofficial estimates, the UAE currency is around 30 per cent undervalued in relation to the US dollar. Some economists say that this has helped to send inflation to 9.3 per cent in 2007 and is likely to rise to 10.9pc during the current year.
On the face of the downslide of USD, there were widespread speculations that the Central Bank will consider a 20pc appreciation of Dirham against US Dollar to inject more purchasing power to the country's currency.
"There is no intention for the time being to revaluate Dirham against US Dollar, and we haven't made any changes in this regard", the Governor was quoted by Al Ittihad.
He also denied recent reports suggesting that the UAE central bank has set up a currency task force to study a possible revaluation of the Dirham against the Dollar.
"Such a task force doesn't exist at all", Al Ittihad Arabic daily quoted the Governor as saying.
UAE's currency is pegged to US Dollar on a fixed rate of 1USD=3.67 Dirham since the early 1980s.
On some unofficial estimates, the UAE currency is around 30 per cent undervalued in relation to the US dollar. Some economists say that this has helped to send inflation to 9.3 per cent in 2007 and is likely to rise to 10.9pc during the current year.
On the face of the downslide of USD, there were widespread speculations that the Central Bank will consider a 20pc appreciation of Dirham against US Dollar to inject more purchasing power to the country's currency.
"There is no intention for the time being to revaluate Dirham against US Dollar, and we haven't made any changes in this regard", the Governor was quoted by Al Ittihad.
Has this Conference been cancelled?
ReplyDeleteCrunch talks on dollar peg set
http://www.gulf-daily-news.com/Story.asp?Article=211063&Sn=BNEW&IssueID=30356
SNIP
DUBAI: Gulf policy-makers and chambers of commerce officials will meet in Bahrain on March 23 and 24 to discuss ways to tackle inflation at near-record peaks, including hearing International Monetary Fund recommendations.
Gulf chambers plan conference on inflation
By Agencies on Sunday, March 9 , 2008
http://www.business24-7.ae/cs/articl...eadlineID=3538
SNIPS
Gulf Arab policymakers and chambers of commerce officials will meet in Bahrain on March 23-24 to discuss how to tackle inflation at near-record peaks, including hearing International Monetary Fund recommendations.
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The conference, entitled "The phenomenon of price rises in Gulf states: causes and future directions", will include speakers from the IMF and European Union, according to the conference agenda, which did not name the officials.
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Dollar pegs in all Gulf Arab oil producers but Kuwait restrict their ability to fight inflation by forcing them to shadow US monetary policy when the Federal Reserve is cutting rates to ward off recession.
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Gulf Arab inflation rates would fall "significantly" were the oil producers to sever their links to the dollar and allow their currencies to float freely, former Fed Chairman Alan Greenspan said during a regional visit last month.
Gulf Cooperation Council (GCC)’s policy-makers and chambers of commerce officials are meeting tomorrow Monday in Bahrain to discuss ways to tackle inflation at near-record peaks, including hearing International Monetary Fund recommendations
ReplyDeletePegging Woes
23 March 2008 09:36:06
Excess cash, peg to weak dollar fuel Gulf inflation
http://www.lankabusinessonline.com/fullstory.php?newsID=958076053&no_view=1&SEARCH_TERM=35
SNIP
(AFP) - Abundant liquidity, triggered by sharply higher oil revenues, and the effect of currencies pegged to a weakening dollar are fueling inflation in the Gulf region, economists say.
And the situation is so serious that Gulf business leaders will meet in Bahrain on Monday to get advice from the International Monetary Fund (IMF) and the European Union on how to tackle the problem. “Only a deep global recession leading to a slowdown in the Asian markets can end high oil prices, according to a new report.”
Thank you for the inputs.
ReplyDeleteThe topic is very interesting.
Not always conferences conclude with decisions for actions.
http://www.gulfchronicle.com/search/label/Currency
The problem is of course that the IMF will be present at the Conference.
ReplyDeleteAnd the IMF prohibits the linking of currency to gold.
We know that SEACEN, the Association of Southeast Asian Central Bankers met on Friday and Saturday March 21 and 22 in Jakarta. We don’t know what SEACEN said about the dollars it holds in reserve. We only know that SEACEN said that intra-regional trade within Asia and domestic demand will help reduce the effects of a U.S. slowdown, while continued efforts to diversify financial markets may also soften the impact.
The sheeple are still fearing the mighty dollar in which oil is therefore still being priced.
The dollar-regime is happily exploiting this fear.
The dollar has managed to build a dominant position in the last decades.
Although this position is now collapsing like a house of cards, the sheeple are still in awe for the “mighty” dollar.
BAHRAIN TO HOST GCC PRICES RISING FORUM
date: 23 03, 2008
http://english.bna.bh/?ID=68168
DAMAM, MARCH 23 (BNA) -- THE GENERAL SECRETARIAT OF THE FEDERATION OF GCC CHAMBERS IS DUE TO ORGANIZE A GULF FORUM IN THE BAHRIANI CAPITAL OF MANAMA ON MONDAY, IN COOPERATION WITH THE GENERAL SECRETARIAT OF THE GCC AND THE BAHRAIN CHAMBER OF COMMERCE AND INDUSTRY (BCCI).
THE FORUM IS TO DEAL WITH PUTTING A CLEAR MECHANISM TO CURB THE PHENOMENON OF RISING IN PRICES IN THE GCC COUNTRIES, SINCE SOME OF THEM HAVE RECORDED HIGH RATES OF INFLATION. SECRETARY-GENERAL OF THE FEDERATION OF GCC CHAMBERS ABDUL RAHIM TAQI TOLD THE SAUDI PRESS AGENCY (SPA) THAT THE FORUM WAS BEING HELD IN A TIME THE PRICES HAD WITNESSED A NOTICEABLE HIKE, WHICH PROMPTED THE GCC COUNTRIES TO ISSUE TEMPORAL DECISIONS OF INCREASING EMPLOYERS SALARIES AND EARMARKING ALLOWANCES. THE FORUM, HE ADDED, WOULD HOST A NUMBER OF EXPERTS, OFFICIALS, REPRESENTATIVES OF GCC COUNTRIES, CHAMBERS AND THE INTERNATIONAL ECONOMIC GROUPS WHO WOULD DISCUSS SEVERAL FUNDAMENTAL ISSUES, OF WHICH: THE REASONS AND THE FUTURE APPROACHES TOWARDS THE RISING PRICES PHENOMENON, AND IT WOULD INCLUDE A VIRTUAL STUDY ON THE RISING OF PRICES AS A GLOBAL ECONOMIC PHENOMENON. HE REVEALED THAT THE FORUM WOULD ALSO TACKLE THE ROLE OF THE GCC COMMON MARKET IN CONFRONTING SUCH PHENOMENON AND THE PART THE PUBLIC AND THE PRIVATE AUTHORITIES HAD PLAYED TO CONFRONT THE PRICES HIKE. EXPERIENCES OF SOME ARAB AND INTERNATIONAL ORGANIZATIONS IN FACING INFLATION WOULD ALSO BE REVIEWED, SUCH AS THE MALAYSIAN, THE EUROPEAN UNION AND THE INTERNATIONAL MONETARY FUND (IMF) ONES, HE ADDED. HE ALSO NOTED THAT THE INCREASING CONSUMPTION ON CONSUMER GOODS WAS DUE TO THE RISING POPULATION GROWTH IN THE GCC COUNTRIES IN ADDITION TO THE GROWING INVESTMENT AND BUSINESSES IN THE REGION, ESPECIALLY WITH THE ENTRANCE OF INTERNATIONAL SECTORS AND COMPANIES TO WORK IN THE GCC. JNQ/ 23-MAR-2008 10:34
Asian bankers hope to escape US woes
By John Aglionby in Jakarta
Financial Times, March 23 2008 22:04 |
http://www.ft.com/cms/s/0/a5317fd2-f909-11dc-bcf3-000077b07658.html
SNIPS
Buoyant intra-regional trade and robust domestic demand should cushion south-east Asia’s economies from the worst impact of any US economic downturn, the region’s central bankers said after their annual conference in Jakarta at the weekend.
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The governors represented 18 countries, from Mongolia and South Korea in the north to Sri Lanka and Fiji in the south, but not China, Japan or India. They highlighted the increasingly diverse structure of the grouping’s economies and expected this to continue in spite of recent international financial turbulence.
Their statement was, however, mostly an economic commentary and gave little indication of any action they might take. Burhanuddin Abdullah, the Bank Indonesia governor and host, told reporters that he and his fellow bankers “must work to secure macroeconomic stability and sustain economic growth amid the global economic slowdown”.
Yes, as an afterthought, and indeed as its final sentence,
ReplyDeletethe article about the Bahrain conference says that
the delegates also discussed the phenomenon of inflation in GCC countries.
GCC common market growth reviewed
Manama: Tue, 25 Mar 2008
http://www.tradearabia.com/NEWS/newsdetails.asp?Sn=ECO&artid=140669
SNIP
The delegates also discussed the phenomenon of inflation in GCC countries, its impact and ways to prevent it in the future.
There’s also this the Gulf Chronicle of course.
ReplyDelete25 March 2008
Inflation in the GCC is set to rise 7% to 14% in 2008
http://www.gulfchronicle.com/2008/03/inflation-in-gcc-is-set-to-rise-7-to-14.html
"[The pegging of the currencies to the dollar] is not the most significant (cause) and we think there are other more effective ways of solving the problem [of inflation]," [Gene Leon, deputy chief of the IMF's Middle East and Central Asia section] said
Thank you for the updates.
ReplyDeleteThe concerns regarding the inflation were raised long ago and no proper actions were taken until now, accept the Fed rate cuts that follow the US rate cuts.
The time will show us.....