Hong Kong has become China's stage for internationalising the yuan, which was de-pegged
from the U.
Hong Kong has become China's stage for internationalizing the yuan, which was de-pegged
from the US dollar last month.
Kuwait is the only Gulf state that de-pegged
a few years ago and pegged to a basket of currencies.
The Chinese may also have de-pegged
the yuan as a way to head off inflationary pressures within their own country, particularly in light of the serious bubble that has developed in the domestic property market, as well as worker agitation for higher wages.
Oman had already said it will not join the monetary union, and Kuwait broke GCC ranks in 2007 as it de-pegged
its currency from the US dollar.
To assume that the private sector will maintain its savings in dirhams if the dirham is de-pegged
to the dollar is to ignore an important source of potential disruption to the economy.
From 2001 to 2008, the dollar lost an average of 40% against a basket of currency, a reason why Kuwait de-pegged
its currency and adopted the basket of currency in 2007.
He said that what was necessary for a single currency, that was de-pegged
from the dollar, was the development of a government bond market.
The Syrian Central Bank de-pegged
its currency with the US dollar in August of 2007.
In a bid to fight soaring inflation, Kuwait in May last year de-pegged
the dinar from the US dollar and linked it to a basket of currencies.
Ibrahim al-Ibrahim, an economic adviser to the emir of Qatar, called on Friday for the Qatari currency to be de-pegged
from the US dollar.
Kuwait has already de-pegged
from the euro, and the likelihood is increasing, he adds, that some or all of the other five GCC countries which currently align their currencies to the dollar will also adopt a wider basket of currencies.