The United Arab Emirates’ central bank governor has confirmed a strategic decision had been taken to shift 10 per cent of its $29bn foreign exchange reserves into euros, denying, however, that the move was prompted by political motives.

In an interview with the Financial Times, Sultan Bin Nasser Al-Suwaidi, also predicted that Gulf Arab countries would move from the dollar peg to a floating exchange rate after the introduction of a single currency, which is planned for 2010.