DUBAI, Dec 1: United Arab Emirates central bank is able to absorb pressure from investors betting on appreciation of the dirham currency, a newspaper reported on Saturday, citing the central bank governor.

A new Certificate of Deposits auction system allows the central bank to deter speculative pressure that took the dirham to a 17-year high this week, al-Khaleej newspaper quoted Sultan Nasser al-Suweidi as saying.

Their speculation will not yield the gains they expect, Suweidi said in remarks initially aired on state-owned Dubai TV, according to the newspaper.

Suweidi triggered speculation about a revaluation last month when he said he was under mounting social and economic pressure to drop the peg to the weakening dollar and track a currency basket.

Suweidi said the central bank was not currently considering such a move and that any decision would be made by the Gulf state’s government with other oil producers preparing for monetary union as early as 2010, Khaleej reported.

Suweidi also told the news-

paper the central bank will track any further interest rate cuts by the US Federal Reserve but will not necessarily match them exactly, adding that he did not expect the decline in the dollar to last long.—Reuters