Thursday 2 June 2011

Gulf approach to U.S. govt debt unchanged -UAE c.banker - Maktoob News

Gulf Arab central banks still regard U.S. Treasuries as a safe investment and the United Arab Emirates may consider diversifying reserves to include China's yuan, the UAE central bank governor said on Wednesday.

Gulf states, which mostly peg their currencies to the U.S. dollar, are major holders of Treasuries and other U.S. assets, with oil -- priced in dollars -- their major source of revenue. Asked whether the UAE was considering changing its policy on buying U.S. government bonds after a bill to increase the United States' debt issuance limit was defeated in Congress on Tuesday, Sultan Nasser al-Suweidi said: "No, there is no change."

"For the time being, I do not think there is a strong move in GCC (Gulf Cooperation Council) countries following Asian central bank investment policies," Suweidi told reporters on the sidelines of a financial workshop in the UAE capital.

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