April 30 (Bloomberg) -- About 18 percent of inflation in the United Arab Emirates is caused by the Gulf state's currency peg to the dollar, Emirates Business 24/7 reported, citing the Dubai Chamber of Commerce & Industry's senior economist.

As the dollar depreciates so does the dirham, making non- dollar imports more expensive as global commodity prices soar, Eisa Abdelgalil said, according to the Dubai-based newspaper.

The U.A.E.'s inflation rate is about 12 percent, the report said.

To contact the reporter on this story: Will McSheehy in Dubai at wmcsheehy@bloomberg.net

Last Updated: April 30, 2008 00:10 EDT