GCC to discuss delaying monetary union: Report


“We will discuss … issues, including the possibility of pushing the timetable further down the road,” Dubai daily Gulf News quoted Ibrahim Aziz Al Assaf as saying.

Saudi Arabia and five neighbours —the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain — had agreed to keep their currencies pegged to the dollar until monetary union in 2010.

But the agreement is unravelling and all six say the deadline will be hard to meet.

Their finance ministers and central bank governors meet this month in Riyadh.

UAE Central Bank Governor Sultan Nasser al-Suweidi said in an interview published in the October issue of .Commerce magazine that the Gulf states were likely to miss the 2010 deadline for the single currency by more than five years.

The deadline has been in doubt since Oman opted last year not to join by 2010, saying the timetable was unrealistic and that it did not want to curtail spending to meet the budget deficit target.

Kuwait cited delays to monetary union as one reason for its decision on May 20 to break ranks with its neighbours and peg its dinar to a basket of currencies.

Kuwait’s central bank said at the time the dollar’s slide against other currencies was making imports more expensive and fuelling inflation. The country has allowed the dinar to rise more than 4 per cent against the dollar since then.



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