Wednesday, January 16, 2008

Gulf to revalue currencies by April

From ArabianBusiness:

Gulf Arab oil producers could revalue their currencies together if the US dollar weakens further, with appreciations of 8% in the UAE dirham and Saudi riyal likely before April, Standard Chartered said on Wednesday.

Markets piled pressure on Gulf currencies last year as speculation mounted that more GCC countries would follow Kuwait and abandon links to the weak dollar partly to curb imported inflation. Kuwait ditched the peg in May.

"It seems likely that GCC countries will maintain their dollar pegs," Standard Chartered said in a note on Wednesday. "However, if we see further dollar weakness against the majors a coordinated revaluation by the GCC is possible," it said....MORE