Hamud Bin Sangur al-Zadjali, the Central Bank of Oman Governor, spoke during European Banking Congress in Frankfurt today, speaking that Oman has no plans to end its peg to U.S. dollar.
While some GCC countries already ended peg to dollar (Kuwait in May, 2007) and some countries planning to do so by the end of this year or earlier next year (U.A.E. and Qatar), Oman, as Saudi Arabia, thinks that speculations around falling dollar are exaggerating and just adding more negative background to the currency market. As al-Zadjali said – dollar follows volatility of the U.S. economy; if you think about it this way then there should be time for both falling and rising.
Revaluation or any other monetary policy shifting will probably hurt Oman’s economy more than it will help. Of course, al-Zadjali is concerned by the record high and rising inflation in the country, but it is not enough to end the rial‘s peg to dollar:
We’re not thinking about revaluation, we’re not changing our policy.
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