Qatar To Shun Dollar Delink Amid IMF Inflation Concerns - QNA

DUBAI (Zawya Dow Jones)--Qatar will keep its peg to the U.S. dollar, the Gulf state's central bank governor Sheikh Abdullah bin Saud Al Thani said in a statement to the official Qatar News Agency. The comment came after the International Monetary Fund said a delink from the weakening dollar would be one way for the Persian Gulf emirate to fight inflation. "The peg to the U.S. dollar would be kept to serve the interest of the Qatari economy and to maintain financial and monetary stability," Al Thani said Sunday. In November, the Qatar's riyal hit a five-year high as investors bet that Gulf Cooperation Council central banks would delink or revalue against the greenback. "The dollar's decline in the past two years compared to other major currencies does not change the fundamentals that support the riyal's peg to the dollar," Sheikh Abdullah said. He added Qatar's annual inflation rose to between 12-13% in the past two years mainly due to "local considerations resulting from economic growth and it does not justify a change of exchange rate strategy." The IMF said Friday although its economic outlook for Qatar was bright due to high oil prices, the Persian Gulf state was at risk from inflation. "A few directors suggested that consideration be given to moving to a more flexible exchange rate regime to help curb inflationary pressures," the IMF said in a statement. Inflation levels in the Persian Gulf state are nearing a record high of 15%.