UAE 'most likely to revalue dirham'

Dubai: The UAE is the Gulf oil producer most likely to revalue its dollar-pegged currency, and is more likely to do it next year than this, a Reuters poll of 17 analysts showed.

Of the analysts, 13 said the UAE was most likely to revalue, two said Qatar and one said Saudi Arabia, according to the poll taken between September 10 and 12.

"The UAE displays similar problems to those evident in Kuwait before it dropped its US dollar peg," said Caroline Grady, an economist at Deutsche Bank. Grady expects the UAE will allow the dirham to appreciate later this year.

Kuwait broke ranks with its Gulf neighbours in May, dropping its peg to the US currency because the dollar's slide in global markets was fuelling inflation.

Inflation in the country hit 12-year highs above five per cent for three con-secutive months to May 31.

Saudi Arabia was the country least likely to revalue, according to the poll.

The other countries considered for the poll were Oman and Bahrain.