UAE may revalue currency by Sunday: report

By Aroonim Bhuyan, IANS

Dubai : The United Arab Emirates (UAE) is likely to revalue its currency, the dirham, which is pegged to the US dollar, as early as Sunday following the greenback’s continuing decline in the global market, according to a report here.

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The report said the announcement will be made on the National Day of the UAE, which falls on Dec 2, and the central bank might call for three to five per cent revaluation of dirham.

“The plan is to make an announcement when the banks are closed – National Day is an option, and if not National Day then the Eid holidays later in December,” the Arabian Business magazine website quoted a source close to the UAE central bank as saying Wednesday.

The source said the central bank might suggest a 3-5 percent revaluation of the currency.

There has been much consternation here about the dollar’s fall, with the expatriate workers seeing their earnings fall heavily.

The central banks of the six Gulf Cooperation Countries (GCC) – UAE, Saudi Arabia, Oman, Bahrain, Qatar and Kuwait – will hold a meeting Monday in Doha, Qatar, and speculation is rife here that a revaluation of all the Gulf currencies is on the cards.

Currencies of the GCC nations have been rallying ever since UAE central bank governor Sultan Nasser Al-Suweidi called a fortnight ago for Gulf currencies to drop their fixed pegs and join a basket of currencies including the euro.

Except for Kuwait, which linked its dinar to a basket of currencies in May this year, all the currencies in this richest oil producing region of the world are pegged to the dollar.

He said he was under a lot of social and economic pressure to drop the dirham’s peg to contain inflation.

Following the Arabian Business report, the dirham surged to a 17-year high Wednesday.

There are around 1.4 million expatriate Indians in this Gulf nation and their remittances to families back home form a major contribution to Indian economy.