What's your salary worth?
Gulf News yesterday:
Gulf currencies plunge drastically since 2002
By Babu Das Augustine, Banking Editor
Published: April 08, 2008, 00:06
Dubai: The UAE dirham depreciated 37 per cent against a basket of 11 currencies of the GCC's leading trading partners in the past five years.
All other Gulf currencies with the exception of the Kuwaiti dinar also declined by 37 to 47 per cent. The Kuwaiti dinar, which was de-linked from the dollar and pegged against an undisclosed basket of currencies last May, depreciated 23 per cent in the same period, according to an estimate by NCB Capital, a Saudi Arabia-based investment bank.
The currency depreciation effectively means higher imported inflation in the region, adding to the overall inflation caused by factors such as supply shortages and surging demand due to the regional economic boom.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
While currency flexibility enabled Kuwait to limit effective depreciation substantially, according to NCB Capital's estimates the Saudi riyal, UAE dirham and Qatari riyal have depreciated 40 per cent, 37 per cent and 47 per cent respectively in nominal terms and the dollar declined 78 per cent against the euro and 40 per cent against sterling.