Wednesday, February 18, 2009
Jim Rogers advises Gulf states to get rid of dollar peg
Source: BI-ME and Bloomberg , Author: BI-ME staff
UAE. The Gulf countries' currency peg to the dollar is a 'terrible mistake' and will cause problems for the region as the US currency is expected to decline, Jim Rogers said.
The six Gulf Cooperation Council states should form a joint currency as soon as possible, the chairman of Singapore-based Rogers Holdings said at a conference in Dubai Monday.
The new currency shouldn’t be linked to any other as the region has enough foreign reserves and oil to back it up.
“You’ve got good foreign exchange reserves and a lot of oil” to back a common currency, Rogers said during a banking conference in Dubai.
Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman agreed in 2001 to form a European Union-style monetary union by 2010 to boost regional trade. Oman later pulled out.
Kuwait is the only Gulf Arab state to have dropped its currency peg to the dollar, giving it some control over monetary policy. FULL STORY.