By NNN-KUNA,
Doha : US Treasury Secretary Henry Paulson said here that depegging currencies of the Arab Gulf countries from the US dollar will not slow down inflation of the GCC states.
Depegging the currency was a sovereign matter, Paulson told a news conference Sunday at the conclusion of his visit to Doha, part of a tour that took him to Saudi Arabia and the United Arab Emirates (UAE).
He noted that Kuwait was the sole Arab Gulf country which depegged its local currency, the dinar, from the US dollar and linked it to a basket of currencies. However, he said, Kuwait “is still suffering inflation caused by high prices of food and construction materials.”
Pegging the Gulf currencies to the US dollar, he said, has long served economies of the Gulf Cooperation Council (GCC) states — Kuwait, Saudi Arabia, UAE, Oman, Bahrain and Qatar.
He said he saw prosperity in the region but he also saw a noticeable monetary inflation which caused problem to decision-makers.
Paulson said his talks in the region focused on oil prices and other energy resources, the financing of terrorism and how to protect international financial institutes from terrorists.
He said high oil prices was linked to supply and demand.
On Iran, Paulson said the regime in Tehran was isolating itself from the international banking system and investment banks because of its policies.
Advising the Iranians, he said if Iran wanted to be part of the international banking system, they should not isolate themselves by their policies.
On his talks in Doha, Paulson said he talked with the Qatari officials on the country’s investments in the US, and the Sovereign Wealth Fund (SWF).