The UAE does not plan to abandon the attachment of the emirate dirham to the dollar. Sultan Nasser al-Suweidi, Governor of the country's Central Bank, has confirmed Abu Dhabi’s intention to "maintain the link of the Emirate's national currency to the dollar." "The dollar will still rise, it is not advisable to abandon it," Al-Suweidi emphasized. He rejected the recommendation of the former US Federal Reserve Chairman Alan Greenspan of the UAE and other countries in the Persian Gulf region to introduce a floating exchange rate of the region’s national currencies against the dollar. "Theoretically, this is possible, but in practice it will lead to great complications," said al-Suwadi. The opinion of the UAE Central Bank manager is shared by many Arabian economists. Experts "exclude the introduction by the United Arab Emirates and other Arabian countries of a floating exchange rate of national currencies."
The Emirate Dirham has been tied to the US dollar for more than 30 years, and the accepted price ratio between them has not changed since the late 80s, although the real value of the dollar against the dirham has fallen by about 8 percent over this period.
The depreciation of the US dollar leads to increased inflation in the Arabian countries. In 2007, according to the local press, inflation in Qatar reached 13 percent, in the UAE - 9.3 percent, in Saudi Arabia - 7 percent.
Arabian experts believe that inflation in the countries of the region is only 40 percent caused by the depreciation of the dollar. The rest of it is due to internal factors, in particular, an increase in the rent of premises, prices for consumer goods and the cost of transport services.
