**Final Blow** Abu Dhabi urges PGCC to drop dollar pegs
Posted July 6th, 2008 by jahazii
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The Government of Abu Dhabi has urged members of the Persians Gulf Cooperation Council to stop pegging their currencies to the US dollar.
“Pegging was adopted when oil prices were low and the greenback still at the height of its strength,” the Emirati daily The National, quoted Abu Dhabi's Department of Planning and Economy (DPE).
“Today, the dollar is falling relentlessly and oil prices are skyrocketing. This new reality calls for a rethink of monetary policies,” added the report.
According to the Emirati daily, all PGCC countries peg their currencies to the dollar, except Kuwait, which abandoned the policy last year in favor of pegging to a basket of world currencies
The DEP said PGCC states must make 'amendments in key aspects of economic policies' such as adjusting their exchange rates to local currencies.
The department added that fixed dollar exchange rates were harmful to PGCC economies as the countries had to pay millions of dollars in commodity price differences.
The decline of the greenback has severely devalued currencies of PGCC states, although oil prices have reached record levels. This is while inflation has increased significantly.
Experts believe the dollar pegs have fueled inflation in the region by forcing Persian Gulf states to take up US monetary policy and add to money supply by cutting interest rates.
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Does this mean the dollar will be returning home.
If so what will they want in exchange, cheap houses, land, national parks, mineral and drilling rights. Or can we just sell them the cheap Chinese toys we find all over town.
grant
Here we go!:)
Here we go!:)
Love to see people care
Love to see people care because my faimly and friends are still "asleep"
I'd be scared if I were them
we have a tendency to invade countries that consider dropping the dollar.
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http://will86aber.wordpre...
About time
A country which has its currency pegged to the USD is forced to emulate the Fed's idiotic monetary policy.
It's hard enough to control inflation when you have your own currency (since the USD still is the reserve currency of the world), but it's impossible with a peg.
bump
good post.