UAE studies dollar peg as Gulf grapples with inflation

BEIJING/ABU DHABI, April 1 (Reuters) – The United Arab Emirates said on Tuesday it was studying its peg to the weak U.S. dollar as states across the world’s biggest oil-exporting region face soaring inflation.

Rifts are growing among Gulf Arab states preparing for monetary union on how to tackle inflation at a 27-year peak of 8.7 percent in Saudi Arabia, a 19-year high of 9.3 percent in the UAE and just off a record at 13.7 percent in Qatar.


Saudi Arabia, the Gulf’s strongest supporter of the dollar peg, gave the latest signal of its commitment to the U.S. currency by slashing import tariffs on 180 goods as of Tuesday to offset the impact of price rises on its people.

Echoing comments by Qatar’s prime minister in February, UAE Prime Minister Sheikh Mohammed bin Rashid al-Maktoum said in rare comments to the media that the oil producer had set up a committee to reconsider its fixed exchange rate.

Reuters