US dollar is still the best choice: UAE Central Bank governor

By Rahul Dass, IANS
Monday, December 6, 2010

ABU DHABI - The US dollar is still the best choice for the global economy, United Arab Emirates (UAE) Central Bank Governor Sultan Bin Nasser Al Suwaidi said here Monday.

Talking to mediapersons before the opening of the Gulf Cooperation Council (GCC) summit, Al Suwaidi said: “What are the choices. There is yen and euro. The choice is limited. The US dollar is still the best choice.”

He said that more than 60 percent of the UAE economy dealings, directly or indirectly, was in US dollars. He was responding to a query on countries looking for an alternative to the US currency as a benchmark for the world economy.

The central bank’s top official said that there are 24 national banks, 23 foreign banks and six GCC banks operating in the UAE. Besides that there are 96 representative offices and 45 investment companies. “UAE’s banking sector is continuing to grow.”

UAE’s total banking assets are 1.6 trillion Dhms and is one of the biggest banking systems in the Arab world. The capital and revenues is 250 billion Dhms.

To a query, Al Suwaidi said: “The situation is much more positive this year. Things were not clear last year…There is confidence in the UAE banking system.”

On Qatar getting to host the FIFA World Cup 2022 and its impact on the regional economy, he said that they don’t make projections over more than three years. “Twelve years is too long a period”.

Speaking on Iran, the top banking official said: “We abide by the UN Security Council resolution. UAE has a good track record of abiding by the resolution.”

Referring to the 2008 world economic crisis, Al Suwaidi said: “When you get into a crisis, you are into it - like it or not… Suffering takes place.”

“We provided sufficient support and we are now far away from that point of time. October 2010 figures show an increased customer deposit.”

He explained that real estate sector is a very important sector in every economy and UAE banking sector’s exposure since 1980 is 20 percent of the deposits, which was less than that of other countries like Singapore. He stressed that they oversee the banking sector’s systemic risk and “we will protect our banks from over exposure”.

He sounded a word of caution regarding monetary union, saying: “…Unified currency should be the last step. Everybody should take their time.”

(Rahul Dass can be contacted at

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