Tuesday, 11 March 2008

UAE sets up task force to de-peg dirham

UAE sets up task force to de-peg dirham
By Issac John (Deputy Business Editor) Khaleej Times 11 March 2008

DUBAI - The Central Bank of UAE has set up a task force to help implement a possible de-pegging of the country’s currency from the US dollar.

The committee is studying the benefits of de-pegging or revaluing and will help coordinate any de-peg of the UAE dirham. It is expected to report its findings to the country’s Ruler at the end of the year, people familiar with the matter said.

The year-long timeframe for the group to report its findings will dash the hopes of many currency speculators that have increased bets on the UAE severing its ties with the dollar in the coming months. The World Bank officials said in a recent interview that the Middle East economies will be hit by an expected slowdown in global growth and the weakening greenback. Growth across the Middle East is expected to fall to as low as 5.6 per cent through 2008, down from about 6.3 per cent, senior World Bank officials said.

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