December 7, 2007 (LPAC)--The countries of the Middle East and Asia should break their links with the U.S. dollar, taking advantage of the currency's vulnerability, demands Gerard Lyons, the chief economist at Standard Chartered--historically one of the leading banks of the British Empire.

In a column in today's Financial Times, Lyons writes that, although the recent summit of Gulf states in Doha failed to resolve the currency issue, nonetheless a seismic shift may be underway in currency policy in the Middle East. Lyons makes three recommendations: 1) The Middle East should change currency policy now, with a 20% revaluation, and introduction of a currency basket to which its currencies should be pegged. 2) Asians should follow the Middle East, and continue to move further away from the dollar. 3) Policy-makers and companies should think more in trade-weighted, than dollar, terms. Although the world has been able to cope with the dollar's fall in recent years because of benign economic conditions, Lyons gloats, "Now, the dollar is vulnerable in a harsher economic climate." Policy-makers in Asia and the Middle East cannot ignore the case for loosening their ties to the dollar, nor should the private sector, the City of London spokesman concludes.