Qatar will keep riyal's peg to dollar


From Reuters
via Gulf News, Dubai
Monday, February 12, 2007

DOHA, Qatar -- Qatar will not change the riyal's peg to the falling US dollar and sees property prices rather than import costs as the main driver of inflation, the finance minister said yesterday.

Qatar, Saudi Arabia, and four other Gulf Arab states have pegged exchange rates to the dollar to prepare for monetary union in the world's biggest oil-exporting region.

Speculation about a region-wide revaluation reached fever pitch last month after the UAE said Gulf states could decide at a March meeting in Riyadh whether to keep or change their exchange rate regime.

"The Emirates is different from us. We are not going to change anything in the relationship between the US dollar and the Qatari riyal," said Finance Minister Yousuf Hussain Kamal.

"There will be no changes to the peg," he said on the sidelines of a meeting of shareholders of Qatar National Bank.

UAE Central Bank chief Sultan Bin Nasser Al Suwaidi cited imported inflation as one reason for reviewing pegs to the dollar, which fell around 10 per cent against the euro last year. Kamal said Qatar was more concerned about containing rising property prices than import costs.

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