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Fri 29 May 2009 04:04 PM

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UAE sticking to dollar forex reserves- central bank chief

Reports about problems in the real estate sector are exaggerated - Sultan Nasser Al Suweidi.

The UAE is not diversifying its foreign currency reserves away from the dollar and its real estate problems have been exaggerated, the central bank chief said on Friday."We are not diversifying our foreign currency reserves. We are sticking to the dollar," central bank Governor Sultan Nasser Al Suweidi told Reuters on the sidelines of a finance conference in the Moroccan city of Marrakech on Friday.

Asked about problems in the real estate sector in the Emirates, he said: "There are reports exaggerating the problems of the sector but we are okay."

He added: "We are not worried about deflation. The UAE economy is very competitive."(Reuters)

Ivo Cerckel 10 years ago

The issuer of a currency needs reserves in order to determine the value of that currency. A distinction should be made between the gold reserves and the forex (foreign exchange) reserves of the issuer of the currency. Forex reserves consisting of worthless paper money can only possibly be used for intervention on forex markets. Such reserves are worthless, no, useless, to determine the value of a currency. Only gold reserves can determine the value of a currency. Oil is the only commodity in the world that is large enough for gold to hide in. Gold reserves are therefore hiding in oil reserves.