[mattduke]

The pressure on the Gulf Cooperation Council (GCC) countries is growing to drop their pegs to the tumbling US dollar with the Dec. 3-4 GCC Summit expected to take a decision on the matter in order to stop soaring inflation in the region.

The latest call for depegging from the dollar came from Jassem Al-Mannai, chairman of the Arab Monetary Fund (AMF), who urged the GCC states to lift their pegs to the dollar, saying revaluations would not solve the problem of rising inflation. Speaking at an economic seminar in Abu Dhabi, he advised the GCC that groups Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and the UAE, to switch to a managed float or peg their currencies to a basket, including the euro, sterling and yen.

ArabNews

[mattduke]

Bahrain accused foreign banks of unethically piling pressure on Gulf currency pegs and warned it would “take action” against anyone targeting its dollar-pegged dinar, a magazine reported, citing the central bank governor.

Bahrain cut interest rates last week to deter bets on an appreciation of the dinar, which has been largely spared the growing pressure for a revaluation.

Investors betting Gulf central banks would eventually sever the pegs to the tumbling US dollar pushed the United Arab Emirates dirham to a 17-year high, the Saudi riyal to a 21-year peak and the Qatari riyal to a five-year high this week.

ArabNews

[roccman]

$this->bbcode_second_pass_quote('mattduke', 'T')he pressure on the Gulf Cooperation Council (GCC) countries is growing to drop their pegs to the tumbling US dollar with the Dec. 3-4 GCC Summit expected to take a decision on the matter in order to stop soaring inflation in the region.

The latest call for depegging from the dollar came from Jassem Al-Mannai, chairman of the Arab Monetary Fund (AMF), who urged the GCC states to lift their pegs to the dollar, saying revaluations would not solve the problem of rising inflation. Speaking at an economic seminar in Abu Dhabi, he advised the GCC that groups Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and the UAE, to switch to a managed float or peg their currencies to a basket, including the euro, sterling and yen.

ArabNews