DUBAI, 14 March 2008 — Qatar denied yesterday reports that it was planning to revalue its dollar-pegged currency or drop the link altogether next month.

On Tuesday, Dubai-based news agency Zawya Dow Jones said the world’s largest exporter of liquefied natural gas could drop its peg in April in a bid to control soaring inflation. It cited an unidentified central bank official.

The Central Bank of Qatar “denies what was published in some media reports attributed to one of its officials that it was planning to announce soon the revaluation of the Qatari riyal or dropping its peg to the dollar,” the bank said.

Deputy Central Bank Governor Sheikh Fahad ibn Faisal Al-Thani denies the report in its “entirety” and affirmed that Qatar remained committed to a 2001 decision to peg its currency to the dollar at 3.64 riyals, it said.

Nonetheless, Qatar is considering options regarding its foreign exchange policy as the dollar weakens, it added.

“This is a response to the pressure on the riyal recently,” said Marios Maratheftis, Middle East economist at Standard Chartered Plc in Dubai. “Still, they are not denying that they are considering their options.”

The Qatari riyal hit its highest level in more than three months on Wednesday as investors bet some Gulf oil producers could revalue their currencies to fight inflation.

Qatar will keep its riyal pegged to the dollar at the same rate for now, its central bank governor said on Wednesday.

“The view of the Central Bank of Qatar until the moment is: there is no change in policy about depegging from the dollar,” Sheikh Abdullah ibn Saud Al-Thani told a news conference after a Gulf Arab meeting with the European Central Bank.

Since January, Qatar’s prime minister, finance minister and an economic adviser to the Emir have said they are studying all options on currency reform to fight inflation that hit 13.74 percent in the fourth quarter, just off a record.

It is natural for Qatar to study the dollar issue given the weakness of the dollar, Sheikh Fahad said.

“But what is certain is that no decision has been made on this issue,” he added.

Qatar’s Deputy Prime Minister Abdullah Al-Attiyah told Al-Jazeera television yesterday Gulf Arab countries should be together in studying any currency policy change.

“All Gulf countries should be together ... no country can go alone outside a strong economic bloc.”

Attiyah said specialists should be given the chance to assess the “gains and losses” from any change in the currency policy. “Let’s not rush,” he added.

The Qatar riyal eased off of a more than 3-month high peak after the central bank’s statements, falling to 3.6356 riyals per dollar, according to Reuters data.

The currency had hit 3.6285 per dollar on Wednesday, its highest since Nov. 30.

Forward rates showed investors betting the riyal will rise 2.9 percent in nine months and 4.7 percent in a year.

Like its neighbors in the world’s biggest oil-exporting region, Qatar is constrained in its fight against inflation by the peg, which forces it to cut interest rates in line with the US Federal Reserve, which is trying to ward off recession.

By contrast, Gulf economies are surging on a five-fold rise in oil prices since 2002.

Weakness of the dollar was contributing to about 40 percent of the inflation in Qatar, whose currency is undervalued by as much as 30 percent, the prime minister told Reuters last month.

Kuwait let its dinar rise against the dollar by the biggest margin in almost eight months yesterday, taking its cumulative gain above 7 percent for the first time since dropping its peg in May to the falling US currency.