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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: oldirtybastard who wrote (30153)	2/29/2008 12:00:42 PM
From: elmatador	Read Replies (1) \| Respond to of 219848

Not shirtless rioting. Other sources: Saudi real estate giant calls on UAE to drop dollar peg by Daliah Merzaban on Wednesday, 27 February 2008 DROP PEG: Al-Tassan said depegging from the dollar would help fight inflation. (Getty Images)The UAE should drop its dirham currency's peg to the dollar to help fight soaring inflation, the chief executive of a Saudi Arabian real estate firm said. Abdulraman Al-Tassan, chief executive of Rakaa Properties, is the latest business leader to call on the second-largest Arab economy to sever its link to the dollar as it tackles inflation which hit a 19-year peak of 9.3% in 2006. "The long-awaited decision on whether to de-peg the GCC currencies from the dollar is one possible effective solution" to combat inflation, Al-Tassan said in a statement issued on Wednesday on the impact of a regional real estate boom on inflation. Rakaa Properties, the real estate arm of Riyadh-based conglomerate Rakaa Holding, is developing a $272 million project on Abu Dhabi's Reem Island. Story continues below ? advertisement UAE business leaders - including Khalaf Al-Habtoor, chairman of conglomerate Al-Habtoor Group, and Dubai Properties Chief Executive Mohammed Binbrek - made calls for an end to the dollar peg in December in a report in the daily Emirates Business 24/7. Surging inflation in the Gulf has fuelled speculation that some countries may either revalue their currencies or drop their pegs to the dollar, which hit a record low against the euro on Wednesday. UAE inflation probably accelerated to 10.9% last year on surging rents, National Bank of Abu Dhabi (NBAD) said this week. "Al-Tassan agreed with the call to de-peg the dirham from the dollar," the Rakaa statement said. Inflation had "undermined the competitiveness of Gulf countries for residents who are beginning to rethink the feasibility of remaining", it said. UAE Central Bank Governor Sultan Nasser Al-Suweidi called for currency reform in November after South Asian construction workers rioted in Dubai over savings lost to dollar weakness. Al-Suweidi has since backtracked on those remarks. Dollar pegs force Gulf states to track US interest rate cuts even though their economies are surging on a near five-fold jump in oil prices since 2002. (Reuters)

To: oldirtybastard who wrote (30153)	2/29/2008 12:00:43 PM
From: elmatador	Respond to of 219848

UAE being held back by dollar peg by Amy Glass in Abu Dhabi on Monday, 25 February 2008 CURRENCY PEG: Woodall said Gulf states' peg to the dollar was no longer viable. (Getty Images) The UAE's booming economy is being held back by its currency peg to the weak US dollar, the Asia editor of The Economist magazine told Arabian Business.com on Monday. Speaking on the sidelines of a conference in Abu Dhabi, Pam Woodall said it was no longer economically viable for the UAE and other Gulf states to continue with their dollar peg as the US economy was spiralling into recession. “All countries pegged to the dollar are suffering rising inflation. Abu Dhabi is growing at an amazing rate, it does not make economic sense for booming economies to peg their currencies to a country that is about to go into recession,” Woodall said. Story continues below ? advertisement Woodall predicted the issue of the dollar peg would continue to dog Gulf states over the next year as further rate cuts by the US Federal Reserve fuelled inflationary pressure. The Fed has cut interest rates by 225 basis points to 3% since September 18 to help ward off recession. Gulf states have been forced to mirror to deter bets on an appreciation of their dollar-pegged currencies at a time when their economies are booming and inflation is at record levels. Inflation in Saudi Arabia, the Gulf's largest economy, hit a 27-year peak of 7% in January, while in the UAE inflation hit a 19-year high of 9.3% - the latest available figure. Soaring inflation and the need for a more flexible monetary policy has heaped pressure on central banks to revalue or depeg their currencies. Woodall said that if the UAE was independent of the GCC and its politics, the country would have de-pegged already. “The governor of the central bank said last year that the bank needed to reconsider the peg, but because you have to consider the Gulf region as whole, including Saudi Arabia, the Gulf economies have to move together,” she said. Woodall said the US recession and resulting weakening of its currency would see the end of the dollar as the world’s main reserve currency. Countries hold large amounts of dollars in reserve in part to maintain the stability of their own currencies. “Already we are seeing evidence where central banks are putting a smaller percentage of their reserves into dollars,” she said. Woodall said the impact of a US recession on the global economy would be reduced by the strength of global emerging markets such as China and India. Rapid growth in these two countries will give the global economy a massive boost, with China set to become the world’s largest economy within twenty years, she said. However, she warned the shift in world power due to the growth in Asian economies would inevitably cause new world tensions.