ABU DHABI, (Reuters) – The central bank chief for the United Arab Emirates said he saw weakness in the dollar as a “temporary situation” and expressed support for the greenback, saying nothing could replace it as a reserve currency.
“There is no other currency to replace the dollar, not the euro,” Central Bank Governor Sultan Nasser al-Suweidi told reporters on Sunday. “It is the currency for investment.”
The comments echo those made several days earlier when Suweidi said the UAE was not diversifying its reserves away from the dollar after the country’s decision to drop plans to join a Gulf Arab currency union fanned speculation it could alter its dollar peg.
Suweidi affirmed the UAE’s plans to keep out of the proposed union for the time being after a media report earlier on Sunday said the four remaining participants in the project — Saudi Arabia, Qatar, Kuwait and Bahrain — would sign an accord on June 7.
“We are withdrawn. We are out for the moment,” he said.
Separately, Suweidi said most, but not all of the banks in the UAE would meet the central bank’s June 30 deadline to increase their capital adequacy ratio to a minimum of 11 percent.
“Most banks will meet it,” he said.