Inflation in oil countries caused by currency peg

In past posts (China busted by the laws of economics) we have talked about China's inflation being caused by its currency peg. Now the Economist reports on the same pheonomenon in the gulf countres: Kuwait, UAE, Saudi Arabia, Oman, and Bahrain. By tying their currencies to the dollar, they give up control of their domestic money supply, which leads to domestic inflation. For a different reason than China, they are reluctant to revalue their currency:

A revaluation has costs. The huge stock of dollar assets held in the GCC would be worth less in terms of the home currencies. But unchecked inflation would also erode the domestic value of foreign assets and in a more damaging way.