The United Arab Emirates will keep its dollar peg despite S&P’s downgrade of the U.S. economy, according to a central bank official comments to Reuters.
Mohamed al-Tamimi, deputy executive director at the UAE central bank’s treasury department, also added that there in no credit risk in investing in U.S. treasuries at present.
S&P cut the U.S. long-term credit rating by a notch to AA-plus in an unprecedented blow amid concerns about the country’s budget deficits and rising debt. There is a possibility for another downgrade in the next 12 to 18 months.
The UAE central bank does not hold any U.S. treasury bonds or government financial instruments, according to a statement released in July.