The Wall Street Journal published an article [subscription required] today about how some of the Gulf nations are rethinking about pegging their currencies to the dollar. Inflation in Qatar, the UAE, and Saudi Arabia is estimated to be at 12%, 8%, and 3% respectively for 2007. Inflation in these nations seems to be the most problematic for immigrant workers from the East who make up a huge portion of the labor force in the Gulf. Maybe the Gulf countries will follow the path of Kuwait and use a basket of currencies to link their currencies to rather than pegging directly to the U.S. dollar?
0 Responses to “Rethinking the dollar peg”