UAE, Oman, Saudi to Keep Peg

News

The UAE and Oman will keep their currencies pegged to the dollar despite the recent downgrade of the USD to AA+ with a negative outlook, the Saudi Gazette reports, citing Albadawa news.

Saudi Arabia is also inclined to stick with the peg, according to Jadwa’s Brad Bourland:

“We do not think the downgrade will have an impact on the exchange rate peg between the riyal and the dollar. At the moment, the pegmakes sense for the Kingdom for economic reasons including the reliance on dollar-denominated oil revenues and the potential damage to non-oil competitiveness and foreign investment any adjustment would cause. In addition, it is backed by a strong strategic commitment. We think it would take a serious decline in the dollar sustained over several years for there to be any reconsideration of the peg.”