Price rise causing big concern in Gulf states
Dubai, Oct. 5 (PTI): With prices of essential commodities showing hefty increases in the past one year, the Gulf states have warned retailers against raising costs ahead of the Eid festival.
The Gulf countries, though flush with huge amounts of money as a result of rising oil income, are also facing problems of imported inflation since they import most of the foodstuff and other items.
With their currencies pegged with the US dollar, a need has been felt for revaluation of currencies or for ending the peg.
Only Kuwait has delinked its dinar with the US dollar, the rest -- Saudi Arabia, Oman, Bahrain, the UAE and Qatar -- are still following the peg with the US currency.
With the Saudi consumer price index hitting 4.4 per cent in August, King Abdullah has asked the Interior Ministry and provincial governors to submit a report on the reasons for the unprecedented increase in the prices of essential commodities, 'Arab News' reported.
The inflation in the Kingdom has been rising steadily in recent months, it was 3.83 per cent in July and 2.96 per cent in May.
The seven-year record in inflation is mainly attributed to the steep rise in rents and the costs of food and beverages.
The Saudi Arabian Monetary Agency (SAMA) declined to match the US Federal Reserve's interest cut last month, driving the Saudi riyal to a 21-year high on speculation that the SAMA would allow the currency to rise against the tumbling dollar.
Business
