United Arab Emirates and Qatar may drop their currencies’ pegs to dollar without waiting for their GCC partners, Omar Bin Sulaiman the governor of the Dubai International Financial Centre said. Increased pressure from that falling dollar, wounded by the mortgage crisis in U.S., inflicts vulnerability on these Middle Eastern oil exporting countries.
As it was mentioned before, U.A.E. may start its Forex reserves diversification right after GCC leaders meeting earlier this December. Qatar is joining Emirates in their determination to act independently of other partner countries. The earlier they get out of the huge dollar national reserves to other countries the better will be the exchange rates. And seeing that Saudi Arabia as the U.S. major ally in the Middle East is not going to make any changes to its foreign reserves policy, U.A.E. and Qatar think that they just don’t have more time to wait.
For both it is a significant step in moving out of the U.S. currency influence zone to a more globally diversified system, which would eventually possibly allow for a more smooth transfer from dollar as the oil trading currency to other world currencies.
(Based on the Bloomberg materials.)
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