87% say dollar peg must be stopped now

DOLLAR PEG: Poll respondents do not agree with UAE Central Bank chief Sultan Nasser Al-Suweidi's decision to stick with the US dollar. (Getty Images)

People living in the Gulf region want leaders to move local currencies away from the dollar peg, according to the results of an Arabian Business poll.

More than 87 percent of those who took part in our online survey thought changes had to be made to secure future economic prosperity in the region.

A large majority of respondents thought the recent strengthening of the US dollar did not mean it was a safe bet for Gulf economies to continue their peg.

Dollar pegs force the Gulf Arab states, bar Kuwait, to track the United States in cutting interest rates.

With the dollar tumbling this year to record lows against the euro and a basket of major currencies, some imports have become more expensive.

Speaking at a public event in Dubai last week, UAE Central Bank Governor Sultan Nasser Al-Suweidi said the strengthening US currency meant there was now "greater reason" to stay with the dollar.

He added that there would be no revaluation of the UAE's dirham peg to the US dollar.

But 64 percent of respondents to our poll said continued pegging would cause long-term damage to Gulf economies.

And a further 23 percent thought the strengthening of the US dollar was only temporary and was not a reason to keep the pegging system in operation.

Thirteen percent of respondents thought the peg should stay for now with another review to take place in six months time while no-one who took part in our poll thought it was a good idea to keep the peg.

Gulf not immune to global slowdown - UAE bank chief
UPDATE 1: More reason to maintain currency peg now US dollar strengthening.

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Dollar pegging
Posted by thomson, auh, u.a.e. on Wednesday 3 September 2008 at 09:38 UAE time


To decide wisely & economically - gulf economy would have been progressively to decide early the dollar weaken the then period and should have been changed from dollar pegging. Really the value of gulf money would have been increased more than 50% comparetively other European & asian currencies. Even though, now also has to think and do it as early as possible without any delay to the GCC states' economy.

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