Kuwait's decision to peg the dinar to a basket of currencies helped shield the country's economy from the dollar's fluctuation and increase stability, the Gulf Times said on Thursday. Kuwait Central Bank governor Sheikh Salem Abulaziz Al-Sabah said the dinar's peg to a basket of several currencies has “assisted in shielding Kuwait from often volatile fluctuations in the values of other currencies.” Its turn “induced a measure of stability to the local economy”, the Gulf Times quoted him as saying. Kuwait has pegged its dinar since 2007 to an undisclosed basket of currencies from other countries with which it shares financial and trade ties. But the dollar is assumed to still hold a significant weight in the basket. Before 2007, Kuwait pegged its currency to the dollar, a policy still being followed by other members of the Gulf Cooperation Council (GCC). The other five GCC states — Saudi Arabia, the UAE, Qatar, Bahrain and Oman — have maintained their currency pegs to the dollar. There have been speculation that the other GCC members might review their currency pegged, following the weakening of the dollar after the US credit rating was downgraded by the Standard & Poor earlier this month and the uncertainty over the US economic outlook.
