Wednesday, May 17, 2006

UAE ponders currency revaluation :: Middle East Times

Quote:
Proponents of such a move say that currency revaluation would be sensible, especially at a time when officials are preoccupied with inflation and the means to curb it. They argue that if the Emirati dirham were to be appreciated against the dollar, imports would become cheaper and exports, primarily oil, would become more expensive.

"In the context of the current economic conditions in the region and the weak long term outlook of the dollar, it makes sense for many of these countries to revalue their currencies against the dollar," the Khaleej Times daily quoted the treasury head of a foreign bank in Dubai as saying.

"Something between a two to five percent revaluation would be appropriate especially now when there are strong inflows on both the current and capital accounts," agrees Hani Genena, a Cairo-based economist with the brokerage firm EFG-Hermes.

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