Soaring inflation threatens peg to $US

Inflation for states in the Persian Gulf is still rising at breakneck speed, new data signalled yesterday, spurring calls for the gas-exporting emirate of Qatar to stop pegging its currency to the flagging American dollar


“Things are not getting better. Action should be taken,” said Ibrahim al-Ibrahim, top economic adviser to the ruling emir, when asked about dropping the peg.

Qatar’s inflation rate is symptomatic of roaring oil-fuelled growth in Arab Gulf states. It put more pressure on council states to shed the policy of pegging currencies at fixed rates to the slack U.S. dollar, as the world’s reserve currency.