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Dollar peg 'poses risk to
economy'
Ahmed A Elewa
Gulf
News
Friday, April 4, 2008
Abu Dhabi: Soaring inflation resulting from the dirham's
peg to the dollar is hurting the UAE's economy and could endanger
national security if urgent measures are not taken to arrest surging
prices, according to two prominent businessmen.
The government must renounce its foreign exchange regime and
address the problem of inflation more seriously, Saeed Abdul Jalil
Al Fahim, chairman of the Al Fahim Group, told Gulf News in an
interview to be published tomorrow.
"In reality, I think inflation in the UAE is higher than
20 per cent, and this indicates that something is wrong,"
he said. Al Fahim added that economic activities are incurring
losses due to the peg.
(Article continues below)
According to official estimates, the UAE's inflation rate is
around 10 per cent. However, the International Monetary Fund revised
its inflation estimate to 11 per cent in 2007.
Reuters reported yesterday that Aamer Al Fahim, a member of the
Federal National Council (FNC) and director of the Al Fahim Group,
said that the government should explain to the public why it remains
committed to the dollar peg and clarify its course on currency
policy.
He claimed the peg was not only stoking inflation, but also fuelling
discontent.
Full
article here.
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