UAE sticking with dollar peg - Sheikh Mohammed

The UAE will maintain the dirham's peg to the tumbling US dollar despite record inflation, Dubai's ruler told ArabianBusiness.com on Tuesday.

Speaking on a flight from Beijing to Shanghai, Sheikh Mohammed bin Rashid Al Maktoum, also vice president and prime minister of the UAE, said the high inflation currently plaguing the UAE economy was only temporary.

Sheikh Mohammed said inflation, which hit a 19-year high of 9.3% in 2006, would settle back down to normal levels, without saying when that would be or what normal levels were.

When questioned about his views on the currency market, he said: “What you are trying to ask me is if I am going to stick with the dollar. Why are you running around the bush asking different questions?… Of course, I will stick with the dollar.”

However, Sheikh Mohammed disclosed that he has established a committee of experts to look more closely at the advantages and consequences of maintaining the dollar peg.

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