IMF Says Gulf States Must Cut Deficits to Keep Currency Pegs
- Speculation has mounted that dollar fixes are too expensive
- Lower oil revenue has taken toll on exporters’ public finances
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Gulf oil exporters must cut spending and narrow their budget shortfalls to keep their currencies pegged to the dollar, the International Monetary Fund said.
While substantial foreign assets have allowed the six members of the Gulf Cooperation Council to fix the value of their currencies to the greenback, keeping the status quo comes at a price as lower crude prices strain public finances, the lender said in a report titled “Learning to Live with Cheaper Oil.”