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GCC countries facing battle to control inflation says economist

GCC countries are facing a huge battle to control inflation with more interest rate cuts predicted in the US, a leading economist has said.

  • Agencies
  • Published: 08:53 January 24, 2008
  • Gulf News

Davos: GCC countries are facing a huge battle to control inflation with more interest rate cuts predicted in the US, a leading economist has said.

Howard Handy, chief economist at Saudi bank Samba Financial Group said GCC central banks' decisions to peg the value of their currencies to the dollar had tied policymakers' hands.

Speaking at the World Economic Forum in Davos, he said: "This is an issue that is going to become harder to deal with, with further interest rate reductions on the part of the
U.S. yesterday and more likely.

“As long as they adhere to their established policy of holding the peg, then they have to look to other options to control inflation," he added.

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