UAE to drop dollar peg 'only with GCC accord'

Seoul/Riyadh: The UAE would only drop its currency peg to the dollar with the backing of the Gulf Cooperation Council, the country's central bank governor said.

The "GCC summit, which consists of GCC countries" has the authority to change the currency peg, Sultan Bin Nasser Al Suwaidi said yesterday in Seoul. The six-member group holds a summit on December 3-4 in Qatar and Al Suwaidi said he did not know whether currencies were on the agenda.

Al Suwaidi said yesterday that the falling dollar will trigger a review of the dirham's 30-year-old peg and his country was considering linking the dirham to a basket of currencies.

Inflation rose to a record 9.3 per cent in the UAE last year, and has hit records in Saudi Arabia, Qatar, Oman and Kuwait this year.

Al Suwaidi said he is "not aware yet" if any decision will be made on depegging from the dollar at the meeting. "I don't know about the agenda of the supreme council summit," he said on Friday.