Gulf currencies collapse 40% April 8, 2008
Posted by mylastresort in analysis, bahrain, qatar, rumors, saudi arabia.Tags: AED, bahrain, BHD, Central Banks, Currencies, Dirham, Dollar, Dubai, gcc, Gulf, kuwait, KWD, oman, OMR, qatar, Revaluation, saudi arabia, Saudi Riyal, US
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Many have called for a revaluation of Gulf currencies from the historical dollar peg. The flood of liquidity and rapid inflation has been hailed as a warning to the falling interest rates, decline of the US Dollar, and record high oil. The loss in value of the Gulf currencies has been partially responsible in the rise of inflation. The inflationary pressures, which should govern an increase in rates by the central banks, have created markets so liquid that deposits are being quoted at negative rates. The list below shows the Gulf currencies depreciation, in value, due to the Dollars decline.
Gulf central bankers to discuss revaluation April 3, 2008
Posted by mylastresort in bahrain, qatar, saudi arabia.Tags: Arab Gulf, bahrain, Bank, Central Bank, Doha, Governers, Gulf, inflation, kuwait, Meeting, oman, qatar, Revaluation, Revalue, uae, United Arab Emirates, US Dollar
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On April 6 and 7 Gulf central bank governers plan to meet to discuss removing obstacles to planned monetary union at a meeting in Doha, Qatar. The Gulf countries are under pressure to revalue in the quickest time to minimize effects on their economies. The countries are planning a joint revaluation against the dollar in an effort not to hinder plans for a single currency in 2010.
The implementation of new regulations along with discussions into the depegging. Weak Gulf currencies are dettering foreign labor from choosing jobs in the region. Recently foreign workers called a strike to demand higher wages as inflation soars.
“The meeting will look into the matter of preparing for monetary union between states of the Gulf Cooperation Council, and ways to speed up performance and remove obstacles”
- Central bank of Kuwait statement
The 6 Arab gulf countries will be meeting to discuss the revaluation of their currencies against the US Dollar, amid soaring inflation and falling interest rates.
Kuwaiti Dinar rises to strongest point March 27, 2008
Posted by mylastresort in analysis.Tags: CBK, Central Bank of Kuwait, Dinar, kuwait, Kuwaiti, KWD, Record, Revaluation, Rise, US Dollar, USD
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Kuwaiti Dinar rises to to its strongest point since dropping the peg.
- Todays mid point .26530 (3.7693)
- Change (from previous day) 0.41%
- Change since May 19, 2007 8.99%
The recent rise in the Kuwaiti Dinar is due to the dollars decline overnight to reach near record lows against the majors.
Qatari Riyal at negative interest rates March 25, 2008
Posted by mylastresort in analysis, qatar.Tags: Deposit, Interest Rates, Lending, MM, Money Market, money markets, Negative, QAR, Qatari Riyal, Revaluation
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QAR DEPOSITS (Indication Rates)
QAR O/N 0.25 2.00
QAR 1M -1.40 – 0.00
QAR 2M -1.56 – 0.20
QAR 3M -1.53 – 0.10
QAR 6M -1.67 – 0.20
QAR 9M -1.63 – 0.15
QAR 1Y -1.44 0.40
(All rates as of 12:30pm KW time)
The recent decline in deposit rates by Qatari banks is indicative of excess liquidity in the market. In previous posts i wrote about the Qatari Riyal revaluations…
“We are fixed against the dollar” – Qatar March 18, 2008
Posted by mylastresort in qatar.Tags: Abdullah bin Saud al-Thani, Central Bank Governor, De-peg, De-pegging, gcc, inflation, Interest Rates, Pressure, qatar, Qatari, Revaluation, Riyal, Sheikh, speculation, subprime
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Inline with todays reports of the US lower interest rates Qatar’s Central Bank Governer has talked to the press regarding the heavy speculation on the Qatari Riyal.
“We are fixed against the dollar since 2001 and we will stick to this policy… We are sticking to the policy of no revaluation and sticking to the policy of no change against the dollar… In Qatar, there are a lot of things to fight inflation but the issue of inflation is about government expenditure in all countries, and also the growth which is happening in the GCC”
- Sheikh Abdullah bin Saud al-Thani, Qatari Central Bank Governor
When asked about how Qatar might react to a probable cut in U.S. interest rates on Tuesday, he said:
“At that time, we will look at the liquidity in the market and look at the state of the Qatari economy, and make the decision.”
Kuwaiti Dinar at record high March 17, 2008
Posted by mylastresort in analysis, bahrain, qatar, saudi arabia.Tags: bahrain, Banks, BHD, Central Bank, Crisis, Depegging, Dinar, Dinar Peg, Dirham, economy, inflation, kuwait, KWD, oman, QAR, qatar, Record, Revaluation, Riyal, SAR, saudi arabia, Trading, United Arab Emirates, USD
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The Kuwaiti Dinar is at a record high against the Dollar. Kuwait let its Dinar sharply rise for the third trading session to a record high of .26600 fils (or $3.7594). The US Dollar plunged accross the board Monday on concerns that the financial crisis in the US will continue to deepen.
The Kuwaiti Dinar has gained 2% since Wednesday
The cumulative gain on the currency is now at 8.70% (expected to hit 15%). The forces on Gulf Arab states to revalue their currencies and drop their Dollar pegs is even more higher. The pressure on Saudi Arabia, United Arab Emirates, Qatar & Bahrain is even greater as the US Dollar reaches record lows and their own economies surging on record level oil prices fuelling sharp inflation.
Qatar central bank denies reports March 13, 2008
Posted by mylastresort in qatar, rumors.Tags: Central Bank, De-pegging, Deputy Central Bank Governor, inflation, news reports, qatar, Qatar Central Bank, Revaluation, Sheikh Fahad bin Faisal al-Thani
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Qatar’s central bank has denied a media report that it might revalue its dollar-pegged currency or drop the link altogether by next month.
“Qatar Central Bank denies what was published in some media reports attributed to one of its officials about revaluation of the Qatari riyal or dropping the peg to the dollar,” it said in a statement. ”Deputy Central Bank Governor Sheikh Fahad bin Faisal al-Thani affirms the denial of this report in its entirety and adds that the QCB is still committed to the Decree No. 34 of 2001 which valued the riyal exchange rate with the dollar at 3.64,” it said.
The central bank is considering options regarding its foreign exchange policy as the dollar weakens, it said.
Kuwaits inflation not eliminated by revaluation – BBH March 12, 2008
Posted by mylastresort in analysis, bahrain, qatar, saudi arabia.Tags: bahrain, Brown Brothers Harriman (BBH), Central Bank, De-pegging, Dinars, Dirhams, Dollar, Economy Speculators Inflation, Federal Reserve, Gulf, Gulf countries, kuwait, oman, qatar, Revaluation, Riyals, saudi arabia, speculation, uae
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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.
more pressure to revalue… March 11, 2008
Posted by mylastresort in analysis, bahrain, qatar, rumors, saudi arabia.Tags: Currencies, global, Gulf, inflation, Revaluation, speculation
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Inflationary pressures around the globe are adding to pressure on the U.S. dollar as central banks from China to Chile choose to fight rising prices by letting their currencies appreciate. Gulf currencies have been seen fluctuating greatly by speculators in an attempt to gain by a revaluation in their currencies….
