The United Arab Emirates' decision to study a possible depegging of its currency from the tumbling US dollar might pressure other countries in the Middle East to follow suit. The central bank of the UAE has set up a committee to study a possible depegging of the dirham from the greenback, according to a report by Zawya Dow Jones on Monday. This committee will help coordinate any delinking of the dirham and is expected to report its finding at the end of the year, the report said. “This pegging system is undermined by the unsustainable combination of falling dollar and rising oil,” said Ashraf Laidi, chief foreign exchange strategist at CMC Markets US. “As long as the two go together, the GCC countries will find no choice but to reconsider their currency regimes,” Laidi said. “The most likely outcome is to move toward a basket of currencies.” Crude-oil futures soared more than $3 a barrel on Monday to surpass $108 for the first time, before closing above $107 a barrel as the dollar remained weak against other currencies. See Futures Movers. “This pegging system is undermined by the unsustainable combination of falling dollar and rising oil.” The Gulf Cooperation Council aims to strengthen economic cooperation in the world's main oil-producing region. Five GCC members - Saudi Arabia, the UAE, Qatar, Oman and Bahrain - peg their currencies to the dollar, setting an official reference rate at which central banks buy and sell. Last May, Kuwait abandoned its peg and now links to a currency basket that includes the euro, the Japanese yen and Britain's pound sterling in addition to the dollar. “This is something that is not surprising at all,” said Kathy Lien, chief strategist at Forex Capital Markets LLC, about the UAE's decision to study a possible depegging of its currency from the dollar. “Overall, this is something that will take a few months to occur at the soonest,” Lien said. __