Moody’s say Gulf states foreign currency reserves provide ample buffers.
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Oil-rich countries in the Gulf Cooperation Council are unlikely to abandon their decades-old currency pegs to the U.S. dollar even as a slump in oil prices puts a $250 billion squeeze on the region's finances, according to Moody's Investors Service.Moody's put credit ratings of five of the six GCC nations on review for a cut earlier this month, citing the shock of depressed oil prices on these economies.The Saudi Arabian Monetary Agency has repeatedly said it will stick with its currency peg.While large one-off devaluations would increase the local-currency equivalent of oil revenues in dollars, it would also increase the cost of foreign-currency-denominated government expenditures, partially offsetting fiscal benefits, Moody's said.
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