Dubai: The UAE should consider a fresh monetary policy, reducing its link with the US currency that has been declining in value.

As a result, the UAE and other Gulf currencies that are pegged to the dollar are losing value.

The UAE, the Arab world's second biggest economy, is part of the six-member Gulf Cooperation Council. It was also part of a planned monetary union till May this year when it walked away over a dispute. The move frees up its monetary policy from certain obligations.

"It may be a good time now for the government to reassess the dollar volatility," Hamad Bu Amim, Dir-ector-General of the Dubai Chamber, told Gulf News. "We always link our monetary and fiscal policies with the United States."

It's time to revisit that link, he said.

"The Central Bank is applying different monetary tools and is not blindly following US policies.

"Having said that, the dollar peg has served us well for the last three decades."

The weak dollar might have helped the US economy — but it has affected other economies, and hurt some.

"Evidently, this hedging tool is losing steam, really," he added.

Costs getting lower

The current economic situation provides a better business environment for investors who could benefit from low cost base in starting up businesses, Hamad Bu Amim, Director-General of the Dubai Chamber, said.

"The current lower property prices and rents and flat inflation creates a good investment climate for new investors," Bu Amim told Gulf News.

"They can start businesses with a much lower start-up capital. Doing business is much cheaper now than a few years ago. Besides the expanded infrastructure at the airport, roads and highways, the opening of Dubai Metro — all strengthens Dubai's attractions as a global hub.

"That's why we are celebrating Dubai's business diversity by inviting the who's who of Dubai at our inaugural Dubai Business Gala," he said.

The gala event, to be held tomorrow, will be attended by leading businessmen, dignitaries and top government officials offering everyone the opportunity to network and talk business.