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Qatar considers April revaluation

by Daliah Merzaban on Wednesday, 12 March 2008
Qatar may revalue its currency or drop its peg to the dollar next month, Dubai-based news agency Zawya Dow Jones reported on Tuesday, citing at least one unidentified Qatari central bank official.

"Everything will be clear by the end of this month because our fiscal year ends on March 31, so by April the central bank will make an announcement," said a Qatari central bank official, according to Dow Jones.

The Qatar riyal strengthened to a seven-day high of 3.63 to the dollar after the report.
"Combined with other recent comments that the Qatari riyal could be undervalued by around 30% this will likely to see appreciation pressure mount," said Deutsche Bank Middle East economist Caroline Grady.

Qatar's prime minister last month urged Gulf Arab oil producers to bridge differences over a single currency, saying monetary union could avert possible unilateral revaluations designed to check soaring inflation.

Qatar's riyal is undervalued by as much as 30% and currency revaluation is being studied, among several options, to check inflation, Sheikh Hamad bin Jassim bin Jabr Al-Thani said in an interview with Reuters.

A Qatar central bank official declined to comment when newswire Reuters called. (Reuters)