Abu Dhabi to continue dollar-based investment
Tokyo, June 1, 2009
Abu Dhabi Investment Authority (Adia), one of the world's biggest sovereign wealth funds, is likely to continue making dollar-based investments because Abu Dhabi has a dollar-denominated economy, an official said.
'Adai has been for a long time following a very stable strategy,' said Ahmed Al Mazroui, executive director of infrastructure development for the Abu Dhabi Investment Council (Adic), the investment arm of the government of Abu Dhabi.
'I would say you would probably continue seeing the same dollar-denominated investments,' he told a forum on investment collaboration between Abu Dhabi's sovereign wealth funds and Japanese firms held in Tokyo on Monday.
'They will continue to be dollar-denominated. This is just because of the economy as a whole. We are an oil-based economy.
We are still mainly dollar-denominated,' he told the forum, which was hosted by the Japan Cooperation Centre for the Middle East.
In a recent report consulting firm Monitor Group estimated Adia had $282 billion in assets, making it the world's second-largest sovereign wealth fund after Norway's Government Pension Fund, which has an estimated $326 billion.
Abu Dhabi is the wealthiest of seven emirates within the UAE.
'Will they diversify into Japanese or other currency? I think this is an investment decision they do from time to time, but it always depends on the situation,' he said.
The dollar has fallen in the past several months as its appeal as a safe-haven currency has been eroded by growing signs that the global recession may have passed its worst.
Such dollar selling has gained momentum in the past few weeks, due to a renewed focus on ballooning US government debt issuance.
On Monday (June 1), the dollar hit a seven-month low against sterling of $1.6245. – Reuters
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