The UAE’s inflation is expected to remain in 2009 at its current estimated level of five per cent, the state news agency Wam has quoted the central bank governor as saying.

Sultan Nasser Al-Suweidi, governor of the Central Bank, said that 'it is expected that inflation in the UAE in the current year will fall to its current estimated level which is 5 per cent,' according to the agency.

Last week, the UAE minister of economy said inflation in 2009 would be in the range of 5 to 8 per cent in the second largest Arab economy.

Standard Chartered's regional head of research said last week that inflation in the UAE could drop to around 2 per cent in 2009 after peaking to an estimated 13-14 perc ent last year.

Suweidi said the UAE should set 'realistic' growth targets as liquidity improves in its banking system thanks to better economic activity, according to Wam.

'His Excellency ... reiterated that there was an improvement in liquidity conditions at UAE banks which is accompanied with (increased) economic activity in various field,' Wam said.

'In relation to necessary precautionary steps in this stage, he stressed the importance of determining the targeted economic growth figure in the country which he said should be realistic  ...,' Wam added. – Reuters