Dubai: The UAE Central Bank holds nearly all of its foreign exchange reserves, worth around $33 billion (Dh121.1 billion), in US dollars with no euros on its balance sheet, a senior Central Bank official told Reuters Wednesday.
The UAE keeps its reserve profile in currencies aside from the greenback low due to its dirham peg to the US dollar.
"Our foreign exchange reserves are around $33 billion. There is no plan to move out of the euro to the US dollar," said Mohammad Al Tamimi, deputy executive director at the central bank's treasury department.
"This is for the simple reason that we do not have euros to sell as our foreign exchange reserves are almost 100 per cent in the US dollar. The Central Bank currently does not hold euros in its foreign exchange reserves," he said.
The euro hit a four-year low of $1.2110 on Tuesday, but it recovered yesterday after government sources said some of the world's richest central banks would not stop investing in the currency.
Al Tamimi also said the UAE Central Bank currently holds foreign currencies such as the Japanese yen, but very small amounts with all exposure hedged, while the bank's total balance sheet was an equivalent to $55 billion.
"Our foreign exchange reserves are fully hedged against foreign exchange risk," he said. "Even when, from time to time, the Central Bank invests in other main currencies for the sake of geographical diversification and for minimising a credit risk, all these investments are fully hedged against foreign exchange risk," he added.
The UAE Central Bank's foreign assets holdings stood at Dh78.3 billion at the end of March, down from Dh89.9 billion at the end of 2009.
