Gulf states to revisit single currency deadline


"The situation will be assessed taking into consideration the economic situation in the region in order to set a new date for the monetary union of the council," said Hamad al-Sayari, governor of the Saudi Arabian Monetary Agency after a meeting of GCC finance ministers and central bankers here.

SPA state news agency quoted him as saying that ministers had "emphasised" their interest in monetary union, but without reaching a decision.

Gulf leaders meeting in December in Qatar are widely expected to reach a final decision.

Sayari also said that the GCC countries — of which all but Kuwait continue to peg their currencies to the deteriorating dollar — "will maintain their current foreign exchange policy."

Proposals include postponing the deadline, or form a two-speed union, under which those states which are ready would launch in 2010, allowing other countries to join later.

Findings from the talks, which were previously scheduled to last two days, will be presented to the six GCC leaders — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — ahead of the December summit.

The single currency plan has met technical, legislative and fiscal hurdles, and Oman’s central bank governor Homud al-Zidjali announced in May that the sultanate would not join the scheme.

"Our decision is not to participate in the Gulf monetary union… because we do not want to restrict our monetary and fiscal policies at present," Zidjali said.

Also in May, Kuwait pegged its dinar to a basket of international currencies in a bid to cut inflation after more than four years of being linked to the dollar.

Economists said Kuwait’s move made it highly unlikely the GCC would meet the 2010 single currency target.

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