Mid East Surprised by Kuwait De-Peg

Two weeks ago, Kuwait sent a shock wave through the Middle East when it suddenly announced that it was terminating its currency’s peg to the USD, and instead linking the Dinar to a basket of currencies.  The announcement caused a great deal of tumult, because it was widely believed that a dozen Mid East nations-most of whom peg their currencies to the USD- were in the early stages of planning a joint currency.  Now, however, the prospects for this common currency are uncertain at best.  As a result, several countries in the same region were quick to criticize the move while renewing their commitment to maintaining their respective Dollar pegs.  The Khaleej Business Times reports:

“At the Central Bank of Oman we did not know about this. There was a position by the leaders of all Gulf countries to remain pegged to the dollar and we have abided by that decision,” said one official.

Read More: Oman sticks to dollar peg after Kuwait forex shift