The falling dollar and market expectations of further Fed rate cuts next Wednesday puts inflationary pressure on oil exporting nations in the GCC (Gulf Cooperation Council) whose currencies are pegged to the U.S. dollar. (Kuwait dropped its peg to the dollar in March of 2007 and remains the only GCC that does not peg its currency.) Inflationary pressure in the countries that retain their pegs is two fold: One, countries are forced to accept easing U.S. monetary policy. Two, rising commodity prices, in part due to a falling dollar, cause further inflation.

Snapshot asks, will other GCC states drop their dollar pegs?

Financial Times - Plummeting dollar a big headache for pegged currencies
Oxford Business Group - Oman and Inflation
Jadwa Investment Group - Saudi Arabia The Inflation Alleviation Plan
National Bank of Dubai - Should GCC Countries Opt for Inflation Targeting