UAE central bank : will be averted US debt

The United Arab Emirates' central bank said on Thursday it is confident there will be a compromise to avert a US debt default by an August 2 deadline, adding that it holds no US Treasury bonds or US financial instruments. "We believe that the debate on the US public debt ceiling issue will end with a compromise solution before the deadline date," the central bank said in a statement. "We do not believe that it is necessary to imagine that the US government may default on its debts given its enormous potential, and we had seen in the past under President Clinton, the US economy's ability to reduce its public debt." A bill to cut the US deficit faced a close vote in Congress on Thursday. Article continues below Deadlock Approval of the plan would break the deadlock over a US debt crisis that has spooked markets and raised the prospect that the government of the world's largest economy will run out of money to pay its bills in less than a week. The UAE central bank reiterated its support for its currency peg to the US dollar. It said a majority of its foreign reserves, denominated in US dollars, were invested in non-US assets. "Central Bank of the UAE currently possesses no US treasury bonds or any other financial instruments issued by the US government due to the very low return on holding these instruments," it said.