Iraqi Dinar Discussion Board

[Panhead]

a blurb from the April 12th IMF meeting;

12. Allow me now to highlight some of the major developments in the Middle East
region. Countries in the Middle East have been staging an impressive growth performance
that remained relatively unscathed by the global financial turmoil, although policymaking in
some countries is being complicated by the depreciation of the U.S. dollar. Growth in oil
exporting countries has been strong, with trade and financial spillovers spurring even higher
growth in many non-oil exporting countries in the region. Not surprisingly, the vibrancy of
domestic demand, coupled with rising food and energy prices in many Middle Eastern
countries, along with emerging supply-side bottlenecks in several Gulf Cooperation
Countries, have stoked inflationary pressures. A somewhat uncomfortably high inflation
could be expected in the near term until macroeconomic policies that have already been
implemented take hold. That said, macroeconomic policies would be appositely adjusted to
put inflation on a firmly downward trajectory before it becomes entrenched. For the specific
case of oil-exporting countries, the exchange rate peg to the dollar will continue to pose a
challenge to monetary policy, particularly given the different cyclical positions with the U.S.
As such, government spending would be calibrated to reflect the cyclical positions of these
economies, with the composition adjusted to target the supply constraints that gave rise to
inflationary pressures.

http://www.internationalmonetaryfund...nt/eng/uae.pdf