DUBAI (Reuters) – Qatar is satisfied with the value of its riyal currency and sees no need to change its peg to the sliding U.S. dollar, the finance minister said in remarks published in the Gulf Times newspaper on Sunday.
“Why should I change the peg when 100 percent of my exports and products are in the U.S. dollar?” the paper quoted Youssef Hussein Kamal as saying in Washington.
“My products look cheaper compared with the non-dollar-pegged products. Otherwise, I cannot sell them,” he said.
The riyal is at its “real value,” the paper quoted him as saying, without being more specific.
Central Bank Governor Sheikh Abdullah bin Saud al-Thani said Qatar, holder of the world’s third-biggest natural gas reserves, had no plans to revalue the riyal, according to the paper.
Qatar, Saudi Arabia and four other Gulf Arab states agreed in 2003 to peg their currencies to the dollar as a step towards creating a single currency by 2010.
Kuwait, which broke ranks with its neighbors and dropped its dollar peg in May, allowed its dinar to rise to its highest level in more than 19 years on Sunday after the greenback slid to record lows against a basket of currencies.
Kuwait has said the dollar’s decline on global markets was driving up inflation and making some imports more expensive. Its inflation rate accelerated to a near 12-year high of almost 5 percent in July.
Qatar, contending with inflation rates almost three times as high as Kuwait’s, has consistently ruled out revaluing its currency.
Inflation would decline to 10 percent within a year thanks to measure to control rising rents and prices, Sheikh Abdullah told Reuters last month.