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Qatar to keep dollar peg

Qatar's central bank governor said on Monday the Gulf Arab state had no plans to change the riyal's exchange rate after neighbouring Kuwait dropped its dollar peg and threw regional monetary union plans into disarray.

Qatar was still working towards monetary union with five other Gulf countries, although meeting the 2010 deadline was not crucial, Sheikh Abdullah bin Saud al-Thani told Reuters.
"We at the Qatar Central Bank will not change the exchange rate and we will stick to the dollar peg. There is no change to our policy at all," Sheikh Abdullah said in a telephone interview from Doha.

Asked if Kuwait's move to switch the exchange rate mechanism to a basket of currencies would put pressure on the Qatar riyal, Sheikh Abdullah said: "I don't think it will at all. Our economy is very strong and we are very steady. We will stick to the currency peg."

Kuwait's currency policy shift would not derail plans to work toward a monetary union, he said.

"We will continue to stick to the Gulf monetary union and coordinate with the others," Sheikh Abdullah said.

"We have three years. We are working now and we will continue to meet as the Gulf Cooperation Council and work towards it. For me, while timing has value, it is more important to do it right."

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