UAE proposals for breaking the link between the dirham and the dollar
United Arab Emirates-USA, Economics, 11/1/1999

United Arab Emirates economic circles suggested breaking the link between the dirham and the US dollar and linking it to a currency basket to help the UAE national economy avoid fluctuations which may cause it losses due to the gains resulting from the dollar's power, which has been linked with the dirham's price since the issue of the national currency.

UAE sources stated that linking the dirham with the dollar may result in a benefit to the national currency and to the local economy in the short run, but in the long run it will be difficult to achieve this, due to the numerous threats facing the US currency, whether due to the escalating US commercial deficits or because of expectations of economic improvements in some countries which consider its currencies strong and international such as Germany and Spain.

The governor of the UAE's central bank, Sultan El-Sweedi emphasized continuing to link the dirham to the US dollar, saying that the dollar is the international trade currency at a ratio of 80%.

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