Kuwait 80 pct likely to revalue its dinar: RBS

DUBAI - Kuwait, the third-largest Arab economy, is 80 percent likely to revalue its currency during the next three months to control inflation, the Royal Bank of Scotland (RBS) said in a report on Wednesday.


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By (Reuters)

Published: Wed 2 May 2007, 6:44 PM

Last updated: Sat 4 Apr 2015, 10:55 PM

Any revaluation of the currency, which is pegged to the dollar, will not exceed 3 percent and is likely to be preceded by efforts to punish speculators, the bank said.

“The authorities are more reluctant to take the politically unpopular step of curbing either fiscal spending or property prices,” the main drivers of inflation, RBS said.

The argument for revaluing to help control imported inflation because of a declining dollar is “unconvincing”, the bank said.

Kuwait’s Central Bank Governor Sheikh Salem Abdul-Aziz al-Sabah, was quoted as saying in December he may widen the dinar’s trading band against the dollar to protect the economy from the rising costs of imports from Europe.

Royal Bank of Scotland said there was a 40 percent chance Kuwait may peg its dinar to a basket of currencies within the next year.

(Reuters)

Published: Wed 2 May 2007, 6:44 PM

Last updated: Sat 4 Apr 2015, 10:55 PM

 
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