|
(MENAFN - Khaleej Times) The United Arab Emirates is not diversifying its foreign currency reserves away from the dollar and its real estate problems have been exaggerated, the Central Bank chief said on Friday.
Gulf countries have seen ambitious growth plans jolted by the global downturn, as oil and revenues have fallen and the construction and real estate sectors have slowed.
"We are not diversifying our foreign currency reserves. We are sticking to the dollar," Central Bank governor Sultan Nasser Al Suweidi told Reuters on the sidelines of a finance conference in the Moroccan city of Marrakech on Friday.
Last week, Al Suwaidi restated that the UAE's policy is to continue pegging the dirham to the US dollar, as do all the other GCC members except for Kuwait. He also said that the gap between total loans and deposits in the country's banking system was narrowing gradually and would eventually be eliminated.
Asked about problems in the real estate sector in the Emirates, one of the top five world oil exporters, he said: "There are reports exaggerating the problems of the sector but we are okay."
"We are not worried about deflation. The United Arab Emirates economy is very competitive," Suweidi said.
The UAE minister of economy said in March inflation in 2009 would be in the range of 5 to 8 per cent. Inflation claimed to record highs in Gulf Arab countries last year but falling oil revenues and the global downturn have helped bring it down.
The UAE, which has the second largest Arab economy, hopes to remain the biggest recipient of foreign direct investment in the Gulf region, accounting for 50 per cent of capital inflows last year.
Morocco Interest Rate
Meanwhile, Morocco is likely to leave its benchmark interest rate unchanged at 3.25 per cent at a meeting next month, Central Bank governor Abdellatif Jouahri said on Friday.
"We will meet in June to review Moroccan economic policy, but all the indicators say that we will keep it at 3.25 per cent," he told reporters on the sidelines of a finance conference here on Friday.
The Central Bank cut the benchmark rate from 3.5 to 3.25 per cent in March, saying underlying inflation was falling and the outlook for the global economy was likely to worsen.
Economic growth in the north African kingdom slowed to 4.8 per cent in the fourth quarter of 2008 from 5.4 per cent in the third quarter and 6.5 per cent in the second.
The slowing world economy is having a knock-on effect on exports, tourism, transfers of funds by Moroccans living abroad and foreign direct investment.
|