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A strengthening US dollar is expected to bring some relief to Gulf residents. In the past few years they have been losing on average 20-25 per cent of their income because of the falling value of the greenback, to which all Gulf currencies are pegged.
It looks like the US Federal Reserve's initiatives to rescue the dollar are paying off. However, it is still unclear if the worst is over, or still to come. Some analysts have been predicting that the dollar's decline has bottomed. However, one has to wait and see if this upturn continues to reassure the public.
Soaring inflation and the rising cost of living have been eating into people's pockets. Those who do not have deep pockets will no longer find this region lucrative enough to earn and save. Such a move can result in reverse migration out of this region and hamper economic growth.
Although salaries and household incomes in the public and private sectors have gone up, it might not be enough to cover the losses incurred due to inflation, the rising cost of living and the dollar peg.
For many, Gulf states are losing their charm as an attractive place to work. That's why the dollar's recovery is so important for the residents.
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