Qatar will maintain currency peg to dollar

Qatar will not change the riyal's peg to the falling U.S. dollar and sees property prices rather than import costs as the main driver of inflation, the finance minister said on Sunday.

Decoupling from the dollar would allow Qatar to raise interest rates as a measure to curb rising inflation rates.

Speculation about a region-wide revaluation reached fever pitch last month after the United Arab Emirates said Gulf states could decide at a March meeting in Riyadh whether to keep or change their exchange rate regime.
"The Emirates is different from us. We are not going to change anything in the relationship between the U.S. dollar and the Qatari riyal," Finance Minister Youssef Hussein Kamal told Reuters.
"There will be no changes to the peg," he said on the sidelines of a meeting of shareholders of Qatar National Bank.
UAE Central Bank chief Sultan Nasser al-Suweidi cited imported inflation as one reason for reviewing pegs to the dollar, which fell around 10 percent against the euro last year.
Kamal said Qatar was more concerned about containing rising property prices than import costs.
"The main inflation problem is coming from real estate and this is because of supply problems...," he said.
Qatar will have the second fastest inflation rate in the Gulf after the UAE, with prices rising 6.4 percent this year compared with 10.1 percent in 2006, according to a Reuters poll in December.
The dollar's decline has split the six oil producers. Saudi Arabia, the largest Arab economy, Bahrain and Oman ruled out currency revaluations after Suweidi's remarks in an interview with Reuters last month.

Policy makers in Kuwait, which revalued its dinar last year, have been quoted as saying they could consider switching to a basket of currencies to cushion the impact of the declining dollar.

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