|TAP Special| Sultan bin Nasser Al Suwaidi, who has been replaced by Emirates Investment Authority chief executive Mubarak Rashid al-Mansouri as the new UAE central bank governor, was a hardcore dollar loyalist and had all along resisted any change in the dirham’s peg to the greenback.
The outgoing governor has served in that position for over two decades and the entry of a financial professional as the new incumbent is believed to signal a tightening of the banking regulations.
But observers say that as long as the UAE keeps its dirham currency pegged to the dollar, the central bank is unlikely to diverge much from the Fed, giving the new governor little room for flexibility.
Mansouri has been presiding over a federal investment fund with an estimated $15 billion worth of assets. He has previously served on the board of the central bank and is a member of the Emirates Securities and Commodities Authority.
Suweidi’s term expired in July 2012, but he continued in his capacity as the governor. As early as in 2008, there was intense speculation that he would be replaced, but to the surprise of all, he was retained for another term.
During his tenure, Suwaidi had stirred market speculation on various occasions about the demise of Gulf currency pegs to the dollar by calling for a review of fixed exchange rates. The comments prompted investors to drive the dirham to a 17-year high. He, however, backtracked on such remarks and reiterated that dollar peg was perhaps the best possible option for the Gulf countries.
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