Seven Days

Dubai, Dec 6: The UAE central bank has warned foreign exchange outlets against ignoring the official exchange rate after some raised dirham prices in anticipation of a revaluation. The bank yesterday said it would reimburse customers who had been overcharged, using funds placed with it by the foreign exchange companies themselves.

It had “noticed that some money changers took advantage of the rumours promoted by some speculators and raised the exchange rate of the dirham against the US dollar”, it said in a statement, adding it would “enforce more severe penalties in case of similar violation in the future.”  Hotels and money changers in the UAE changed dollars into dirhams at as much as 17 per cent below the official rate in anticipation of a revaluation, an action the bank described as harmful to the country's tourism industry.

Gulf rulers are meeting in  Doha amid frenzied speculation that some may drop  their pegs to the declining dollar or allow currencies to appreciate.  On the first day of the summit, however, the UAE foreign minister told reporters there would be no decision on the dollar peg at the ongoing meeting.

“There is no intention to take a decision at this summit regarding de-pegging the Gulf currencies to the dollar,” WAM reported Sheikh Abdullah bin Zayed al-Nahayan as saying.

Gulf currencies weakened yesterday after Saudi finance minister Ibrahim al-Assaf ruled out dropping his country's peg. Bids on the UAE dirham eased to as low as 3.6715 per dollar after  hiting a 17-year high of 3.6561 per dollar last Friday.