Charts & Numbers

A report today by Brown Brothers Harriman (BBH) reckons that Gulf countries are not ready to abandon their dollar denominated pegs, yet.

“We attribute inflation to the strong economies that have driven up domestic costs rather than the falling dollar especially given the dollars role as an invoicing currency in the region” – BBH

The dollar has been setting record lows against major currencies this month & the Fed is agressively cutting rates to save its crumpling economy. Speculators are persistent that Gulf currencies will re-consider their pegs  in the face of increasing inflationary pressures. BBH’s standpoint is in the fact that Kuwait’s inflationary problems were not eliminated by its de-pegging in May 2007.