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Sanaa: Additional housing supply later this year in the UAE should ease soaring rents and near-record inflation, the central bank governor said on Wednesday.
"Rent pressures will subside in 2008," UAE Central Bank Governor Sultan Nasser Al Suwaidi told Reuters on the sidelines of a meeting of Arab government finance officials in the Yemeni capital.
Lower inflation could ease pressure on the UAE, the world's fifth-largest oil producer, to revalue its currency against the tumbling dollar or even to drop the peg to the US currency altogether.
Inflation hit a 19-year high of 9.3 per cent in 2006. The International Monetary Fund estimates inflation at 11 per cent last year. "Many units will come in the market and supply will increase ... the reason for inflation will not be there when more units become available," Suwaidi said.
The UAE has been under pressure to drop its peg.
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