Sunday, October 07, 2007

Revaluation of the dirham?

Some "experts" say its likely.

The Khaleej Times
Predicting a 30 per cent possibility for an imminent revaluation of the UAE dirham, monetary experts said the UAE currency needed a significant appreciation of 35 per cent against dollar to regain its intrinsic strength in relation to other currencies.

Gary Dugan, Chief Investment Officer, Global Wealth Management, Merrill Lynch, told Khaleej Times that the GCC currencies needed to appreciate by around 35 per cent to reduce excessive savings. “In the shorter term, we expect the UAE or Qatar will move to peg versus a basket of currencies this year.”
As the article notes the UAE central bank has insisted it is not going revalue or more to a peg.



Blogger secretdubai said...

*praying to God the dirham will be revalued*

According to one source the constant denials are purely political - so the US doesn't start kicking up a fit. He said (this was about two months ago) that it would be revalued in six months.

I fear that it will not be revalued by anything like the amount needed to make the dirham actually worth something again, but anything would help.

4:53 AM  
Anonymous jasonjnash said...

Actually, outside of foreign expats complaining about the falling value of their salaries in non-US dollar terms, the UAE has every reason to keep the peg.
Check out the case for Saudi Arabia in the following link. Much of the same logic applies to the UAE.

11:41 AM  
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11:00 AM  

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