E-mail Article
Printer Friendly
Share Article
Kuwait revalues dinar for fourth time
Kuwait allowed the dinar currency to depreciate 0.11% against the US dollar today, a day after an appreciation of around 1.7%.
It was the fourth time Kuwait has changed its dinar rate this year, the first revaluation coming on May 20 when the Middle East's fourth largest oil exporter dropped its peg to the US currency and adopted a basket of currencies.
The central bank changed the dinar rate to 0.28230 from 0.28200, it said.
Simon Williams, an economist at HSBC in Dubai, said the depreciation just a day after letting the dinar appreciate against the dollar could be a sign that having boosted the value of the dinar to a target level, Kuwait's currency basket regime has been brought into effect.
"The move suggests that Kuwait has activated the currency basket regime it announced in May. The dollar strengthened yesterday so if the basket is now in operation, it was right that the dinar fell,” he said.
Williams said that if the currency basket has been activated, there would now be small changes in the value of the dinar against the dollar on a regular basis to reflect changes in the relative values of the world's major currencies.
Kuwait’s decision to allowed the dinar to appreciate around 1.7% against the dollar on Wednesday renewed market speculation that the US currency's slide could force other Gulf oil producers to review their pegged exchange rates.
Oman on Wednesday ruled out revaluing its rial against the dollar following Kuwait's decision, with the country's acting central bank governor describing the decline of the dollar as "a passing phase".
The dollar held on to gains today, staying off a record low versus the euro as traders reckoned that the US currency has been sold to a point that well reflects concerns about the US subprime market for now.
The dollar rose sharply on Wednesday, brushing off weak US homes sales data and posting its biggest daily gain in a year against a basket of major currencies as traders covered short positions after the dollar index hit a 15-year low.
Quick Links(Residental)
Filter by address:
No Comments