DAR AL ISLAM - U.A.E.: THE DIRHAN TO REMAIN PEGGED TO THE U.S. DOLLAR

It appears that the U.A.E. will continue pegging their dinar to the U.S. dollar...

Yesterday, we had a couple of stories that reported on Jordanian islamists demanding that Jordan stop pegging their currency to the U.S. dollar and Kuwait dropping pegging their currency to the U.S. dollar...


UAE's dollar peg to stay
By Abdul Hamid Ahmad, Editor-in-Chief

Seoul: The UAE is keeping its currency’s peg to the dollar and will rethink its commitment to the GCC monetary union if it would affect the country’s economy.

“The UAE government is not thinking of delinking the dirham from the dollar,” His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, told media officials in Seoul on Tuesday, the second day of his state visit to South Korea.

He met earlier with South Korean President Roh Moo-hyun, where they discussed means to expand bilateral ties.

On Sunday, Kuwait abandoned its currency's peg to the dollar in favour of an undisclosed basket of currencies resulting in sudden appreciation of the dinar. The Kuwaiti decision is seen as the strongest hurdle yet in the way of the creation of the Gulf monetary union by 2010.

Shaikh Mohammad told the media the monetary union is “currently under study” in the UAE. “The UAE will have reservations on the union if it were to affect our economy. Concerned officials will have to look into that,” he explained.

The South Korea visit, he noted, is aimed to expand relations with Asian countries, including also China and Japan, to create a balance in UAE foreign relations.

“We want to create this balance between East and West. As you see, I am today visiting South Korea while Shaikh Mohammad Bin Zayed Al Nahyan (Deputy Commander-in- Chief of the Armed Forces and Crown Prince of Abu Dhabi) visits the US.”

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Pertinent Links:

1) UAE's dollar peg to stay