Kuwait Parliament Committee Calls for Revaluation of the Kuwaiti Dinar
KUWAIT TIMES: KUWAIT: A Kuwait parliament committee urged the government to allow the dinar currency to reflect the real value of the US dollar, which is at record lows against the euro, state news agency KUNA reported yesterday. "On the foreign exchange market the government is (asked) to review the exchange rate of the US dollar in the light of the actual prices on the market...," KUNA quoted budget committee recommendations as saying.

Kuwait abandoned its peg to the dollar in May, allowing the currency of the world's seventh largest oil exporter to appreciate 0.37 percent. The central bank said at the time it wanted to contain the impact of the dollar's slide on imports, which were driving up inflation. Analysts including those at Deutsche Bank and Standard Chartered expect Kuwait to move again this year especially if the dollar's slide continues.

The dollar slipped for a second session yesterday, hitting a fresh low against the euro, a 26-year low against sterling and a one-month trough against the yen. The parliamentary committee made the comments as part of a package of recommendations which parliament adopted as it approved the 2007/08 state budget. Standard Chartered said in June Kuwait was likely to let its dinar rise a further 0.35 percent against the dollar in 2007. Dinar revaluation urged (more)

Mark Alexander

Kuwaiti Dinar No Longer Pegged to the Sliding US Dollar
FINANCIAL TIMES: Kuwait on Sunday removed its currency peg to the US dollar, throwing plans for a Gulf currency union by 2010 into doubt and raising the prospect that other oil-producing states might abandon long-held dollar pegs.
Sheikh Salem Abdelaziz Al Sabah, governor of the Central Bank of Kuwait, told the official Kuwait news agency that the decision had been made owing to the “detrimental effects of the pegging system to the national economy”.

Since late last year, Kuwaiti officials have hinted that the country would revert to a basket of currencies to prevent the sliding dollar increasing the cost of imports, which has stoked inflation to more than 4 per cent, double the historic average. This has encouraged speculators to plough billions of dollars into the dinar over the past few months, betting that the central bank would allow the dinar to appreciate. Kuwait abandons US dollar peg (more) By Simeon Kerr

KUWAIT TIMES:
Kuwait drops dollar peg

Mark Alexander