x Abu Dhabi, UAEFriday 21 July 2017

Central Bank's Suwaidi gets new term

Sultan bin Nasser al Suwaidi, the governor of the UAE Central Bank, will remain in his role for another four-year term.

Sultan bin Nasser al Suwaidi, the governor of the UAE Central Bank.
Sultan bin Nasser al Suwaidi, the governor of the UAE Central Bank.

Sultan bin Nasser al Suwaidi, the governor of the UAE Central Bank, will remain in his role for another four-year term, ending months of speculation that he could be replaced. Sheikh Khalifa bin Zayed, the President of the UAE and Ruler of Abu Dhabi, issued a decree yesterday reappointing Mr Suwaidi as governor and naming members to the board of the central bank, the state news agency, WAM reported.

Mr Suwaidi's last term officially ended in December, but he carried on with his duties in the interim. He said in December it could take the Government as long as two months to renew his mandate and that of the board. Neither the Government nor the central bank made any statements during the period regarding Mr Suwaidi's fate. He has been at the helm of the central bank for more than a decade. Yesterday's decree from Sheikh Khalifa also named Khalil Fowlazi as chairman and Omer ­Mohammed Suleiman as deputy chairman of the central bank's board.

Twice last year, Mr Suwaidi stirred market speculation about the demise of Gulf currency pegs to the dollar by calling for a review of fixed exchange rates. The comments prompted investors to drive the dirham to a 17-year high. He has, however, backtracked on remarks made in November, when he suggested Gulf oil producers track a currency basket. Since then, he has consistently said that the current policy is the best one as the GCC works toward an eventual monetary union.

Mr Suwaidi's chief task has been collaborating with his GCC counterparts on moving towards a single monetary union and deciding the fate of the dirham's peg to the dollar. The UAE - like all GCC countries except for Kuwait - pegs its currency to the dollar. This policy has come under attack as the dollar's sinking value has been blamed for pushing inflation in the country to a 20-year high. Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, said in April that the nation would keep its dirham pegged to the dollar at the current rate.

Most analysts do not expect the Emirates, or other GCC countries, to follow Kuwait's lead and revalue their currencies unilaterally. Other central bank board members named in Sheikh Khalifa's decree yesterday included Younes Hajji Khoori, Mubarak Rashid al Mansouri, Hilal Khalfan bin Dhairir and Khalid Mohammed Salem. Their terms will also run for four years. * with Reuters @Email:mjalili@thenational.ae