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Abu Dhabi: Speakers addressing the UAE Global Investment Forum in Abu Dhabi yesterday said the UAE must urgently abandon the peg to the dollar for a basket of currencies with the increasing pressure arising from the falling greenback. The dollar has lost one-third of its value against major currencies since 2002.
"A basket of currencies with appropriate weights for currencies such as the Japanese yen, which is especially significant in the UAE's trade, is needed, and such an approach should be towards a flexible exchange rate regime to enable the economy to cope with the changes taking place in the international financial world," said Nasser H. Saidi, chief economist at Dubai International Financial Centre (DIFC)
Economists and CEOs attending the forum lamented rising costs in the country. "Transport costs have been rising remarkably, as well as fuel costs, especially in the construction sector, where the diesel price is increasing significantly," said Walid Al Muqqarab, chief operating officer at Mub-adala Development.
Exchange rate policy is estimated to be responsible for about 20 per cent of the overall inflation.
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