Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
964116 | Journal of International Financial Markets, Institutions and Money | 2011 | 17 Pages |
Abstract
The slumping of the GCC currencies against other major currencies and the ensuing rising imported inflation have sparked an ongoing debate about the viability of the dollar peg. This paper extends and applies the contribution of Berger et al. (2001) to the largest economies of the GCC, namely Saudi Arabia, Qatar, and the UAE, by introducing a foreign inflation dimension. Empirical estimations suggest little or no evidence supporting the suitability of a fixed exchange rate regime in any of the three analyzed economies. It is this paper's contention that policy makers ought to play an immediate and active role in identifying a suitable more flexible exchange rate regime as well as an achievable timeline and road map to effectively abandoning the dollar peg.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Jay Squalli,