Revaluation of currency ???
Dec 6th 2007, 1:40 pm
#31
Forum Regular
Joined: Jun 2007
Location: London & Brussels
Posts: 283
Re: Revaluation of currency ???
I am a bit confused I have just checked Bahrain website and it states that the currency is pegged against the dollar not a currency basket.
http://www.cbb.gov.bh/cmsrule/index....article&ID=947
http://www.cbb.gov.bh/cmsrule/index....article&ID=947
Dec 7th 2007, 5:03 am
#32
Banned
Joined: Aug 2007
Location: Kuwait - Sringboard to Djibouti
Posts: 305
Re: Revaluation of currency ???
Kuwait has depegged to the extent that it has moved from a constant multiple of the dollar to a multiple of a basket of currencies. It did so in May.
The basket of currencies is not disclosed by the Central bank but I est that at least 30% of the currency weighting within the basket is USD. At least.
Most likely it is higher.
The reason for not completely abandoning the peg is that it screws up your customers and suppliers and a lot of the goods in the region were made by countries pegged or associated with the dollar and the revenues are from dollar based oil.
Whilst we individually may fuss about a few AED / KUW and go from Thomas Cook / Bank / Post office to get the best rate, this is not a preoccupation for the central banks who have a longet term strategy and hedging (Kuwait Investment Office is one of the largest Sterling denominated funds...)
So they don't think the same way we do.
Which is good because messing with the dollar can cause wars.!
The basket of currencies is not disclosed by the Central bank but I est that at least 30% of the currency weighting within the basket is USD. At least.
Most likely it is higher.
The reason for not completely abandoning the peg is that it screws up your customers and suppliers and a lot of the goods in the region were made by countries pegged or associated with the dollar and the revenues are from dollar based oil.
Whilst we individually may fuss about a few AED / KUW and go from Thomas Cook / Bank / Post office to get the best rate, this is not a preoccupation for the central banks who have a longet term strategy and hedging (Kuwait Investment Office is one of the largest Sterling denominated funds...)
So they don't think the same way we do.
Which is good because messing with the dollar can cause wars.!
