Nasser al-Saidi, chief economist at the DIFC, says: “While a US dollar exchange rate peg policy provided for monetary and price stability in the past, structural changes, increased economic and trade diversification with Asia and weakness of the US dollar on international markets, provide the rationale for a change in policy towards inflation targeting.”

The economists' report also says that Qatar and the UAE, which have inflation rates of 13.76 per cent and 11.1 per cent respectively, were failing the GCC monetary union convergence criteria of having inflation rates within 2 per cent of the GCC average. The current average is 6.91 per cent.

The report adds that, despite failing the inflation criteria for convergence, good progress was being made on other areas.