Dollar peg under scrutiny

Pressure could return for a review of the dirham’s peg to the US dollar next year as the UAE economy recovers from the global recession.

The shortcomings of mirroring US monetary policy under the fixed exchange rate are likely to be exposed if accelerating inflation returns to haunt consumers, economists and analysts say.

A convergence on monetary policy with the US suits the UAE at the moment, with both countries looking to keep interest rates low to spur economic recovery.