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Tue 15 May 2007 01:59 PM

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Kuwait won't drop the dollar, says KSA

GCC countries agree 'unanimously' to keep the dollar-pegged exchange rate policy.

Kuwait has agreed with five other Gulf Arab oil exporters not to change a dollar-pegged exchange rate policy that is designed to prepare for monetary union, the Saudi Arabian central bank governor said on Tuesday.

"We agreed unanimously not to change to our currency policy. Kuwait was with us on that," Hamad Saud al-Sayyari told reporters in Dubai.

Saudi Arabia, one of the six Gulf states, is a strong proponent of the policy of maintaining pegs to the dollar, which has been sliding this year and touched a record low against the euro last month.

Kuwait was named as the top candidate for a currency revaluation in a Reuters poll of analysts in March and the country's central bank has cut key interest rates three times in the past six weeks to deter speculators betting on an appreciation of its dinar.

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