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No plans to drop dollar peg

The United Arab Emirates has no plans to abandon the currency’s peg to the dollar, central bank Governor Mubarak Rashed Al Mansoori said.

“The dirham peg to the US dollar has served the UAE well over time,” Al Mansoori said in an e-mailed answer to Bloomberg News questions. The central bank “maintains a firm commitment to the peg.”

Investors have increased bets that the six Gulf Cooperation Council countries may be next to abandon their pegs after China devalued the yuan and Kazakhstan allowed its currency to float. Saudi Arabia, the world’s biggest oil exporter, has already said it had no plans to decouple from the US currency.

Bets for a devaluation of the dirham surged in the past month to the highest in more than six years on 10 September, according to data compiled by Bloomberg. One-year forward contracts for the currency, an indication of where the dirham is expected to trade in the period, dropped 24 points since then to 91.45 points.-Bloomberg