The UAE's Central Bank governor said yesterday that the country is committed to keeping its currency pegged to the US dollar
The UAE's Central Bank governor said yesterday that the country is committed to keeping its currency pegged to the US dollar and is reinvesting in US Treasury bills.
Sultan Nasser Al Suwaidi also voiced confidence in the long-term stability of the euro, even as fears mount that Europe's debt crisis could sink the 17-nation currency.
Al Suwaidi, speaking to reporters in Abu Dhabi, called the European Union a "very, very important bloc of countries" and predicted that "everything will be fine in Europe". The exchange rate of the UAE dirham is linked to the greenback. But some analysts have questioned the value of the keeping the policy as the US struggles and the dollar stays weak.
Al Suwaidi said the dollar link has served the Emirates well, adding that "we are very much with the peg".
"There is absolutely no change... The fixed peg has served our economy for many years," he said. The central bank chief also noted that the UAE has begun buying up US Treasurys after shunning them earlier this year, but is not as heavily invested as it once was. The bank in August surprised investors by saying it no longer had any US securities on its books because of their low returns.
© 7Days 2011
