US dollar liquidity tightens

Hard to get: The dollar squeeze in the Gulf is not so far as serious as it was for a few months during the global financial crisis in 2008, but it is significant, especially for smaller banks in the region. – Bloomberg

DUBAI: US dollars are becoming more difficult and expensive to obtain in Gulf money markets since Standard & Poor’s sharply downgraded the sovereign credit ratings of three of the region’s oil exporters last week, bankers say.

The tightening of dollar liquidity, despite most countries’ currency pegs to the dollar, which normally facilitate dollar supply by reducing exchange rate risk, shows persistent worries over the region’s ability to cope with an era of low oil prices.