Gulf states would consider revaluing their dollar-pegged currencies together at some stage to tackle rising inflation, Qatar's finance minister said.

'Our concern is to control inflation,' Youssef Hussein Kamal said, ruling out a unilateral revaluation or severing the riyal's peg to the weak dollar.

As with other states in the Gulf Cooperation Council, Qatar is constrained in the fight against inflation because the dollar peg forces it to track U.S. monetary policy at a time the Federal Reserve is cutting interest rates.

Inflation in Qatar hit 13.73 percent in September, just below a record, as accommodation costs, including rents, surged nearly 29 percent.

With inflation rising across the region while at the same time the Fed is cutting rates to contain fallout from the US subprime mortgage crisis, markets have been betting that some Gulf states would eventually allow their currencies to appreciate against the dollar.

'This is a GCC concern,' Kamal said, when asked if there was any possibility Qatar would look at revaluing its currency. 'All GCC countries have to agree upon any change.'    

Asked if Gulf states would look at revaluing their currencies together, Kamal said: 'Yeah, but not today, tomorrow or next month'.

The riyal rose to a one-week high of 3.6350 against the dollar after his remarks.

Gulf Arab currencies rallied last year after UAE called for the region's central banks to sever their dollar pegs as Kuwait did in May to help fight inflation. Saudi Arabia dismissed the idea.

Rulers of the six states preparing for monetary union as early as 2010 agreed at a summit in Qatar last month to retain their dollar pegs and keep any talks on currency reform secret.

Many analysts still believe it is only a matter of time before the countries with the highest inflation give up on their pegs and focus on containing prices at home. - Reuters