The problem with huge currency reserves is that the massive amount of funds or capital that is being created can create unwanted economic side effects – namely higher inflation. The more currency reserves there are, the wider the monetary supply, which causes prices to rise.

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Furthermore, the indecision about adjusting the peg for an economy's currency can be coupled with the inability to defend the underlying fixed rate.

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Even if the currency seems stable during the last years, one can not exclude the potential threat of a release of a floating exchange rate system or a heavy adjustment of the currency value in comparison to the U.S. Dollar induced by the UAE-government. In the past, there occurred cases, in which a pegged exchange rate system came to an end - including uncomfortable consequences for investors. One example therefore is the Suisse Franc, which was pegged to the Euro. After the announcement to decline the pegged system and continue with a free floating exchange rate system, the Franc falls over 25 % in a few minutes.