He said the board will review the exchange rate between the greenback and the euro and make a decision.

"The dollar-euro exchange rate is fluctuating and we haven't seen the end of fluctuations," he said.

In July, a Central Bank official said the bank might convert five per cent of its foreign exchange reserves to euros from dollars. The euro gained nearly 60 per cent against the dollar in the three years to 2004.

Suwaidi was speaking on the sidelines of a three-day conference on Islamic finance which began yesterday. The event, organised by Dubai Islamic Bank, highlighted challenges facing the development of Islamic finance.

Islamic banks should consider establishing a central bank or an international body to enhance coordination among these institutions, said Muslim World League Secretary-General Dr Abdullah Bin Abdul Mohsin Al Turki, who is also chairman of the Islamic Universities League.

He said Islamic banks lack the capital to keep pace with the latest developments in the banking industry.

"Currently, Islamic banks do not have a reference to depend on for identifying whether their operations comply with the Islamic finance principles. This is considered a major barrier to the development of Islamic banks," he said.

He also took objection to the present situation in which Islamic banks are obliged to keep deposits in central banks, most of which operate on systems that do not comply with guidelines that Islamic banks follow.

The event, which is taking place in cooperation with the Islamic Development Bank and Islamic Universities League, will feature eight discussion sessions on the development of Islamic banks.

Dr Mohammad Khalfan Bin Kharbash, UAE Minister of State for Finance and Industry and chairman of Dubai Islamic Bank, said during the past 30 years Islamic banks have developed worldwide.

"Today, there are more than 280 Islamic banks in 48 countries with deposits approaching $400 billion (Dh1,468 billion). Adding to that, about 300 traditional banks have established Islamic subsidiaries or offered Islamic products," he said.

The minister said the value of Islamic issues in the Gulf states alone approached $4 billion last year and they invariably received an enthusiastic response from both Islamic and non-Islamic financial institutions and banks.

He said the contribution of non-Islamic institutions to such issues approached 60 per cent, proving that Islamic finance not only offers an alternative to conventional finance, but also gives a wider range of investors the opportunity to participate.