From: Reuters
Published April 6, 2008 06:35 AM

Several Gulf states set on currency deadline

By Daliah Merzaban

DOHA (Reuters) - Several members of the six-nation Gulf Cooperation Council (GCC) that includes Saudi Arabia are determined to meet a 2010 target to introduce single currency, the council's secretary general said on Sunday.

"There is determination from a number of countries to complete monetary union by 2010," Abdul-Rahman al-Attiyah said at a central bank governors' meeting in Qatar's capital, Doha.

Qatar holds the revolving chair of the GCC, a loose economic and political bloc which also includes the United Arab Emirates, Kuwait, Bahrain and Oman.

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Some Gulf countries were ready to join by 2010 and others could follow at a later stage, Attiyah said, without being more specific.

The six states in the world's biggest oil-exporting region have been trying to negotiate a single currency by 2010, a deadline policy makers across the Gulf have said would be difficult, if not impossible, to meet as countries seek to follow divergent strategies to try to cope with rising inflation and dollar weakness.

Qatar's Central Bank Governor, Sheikh Abdullah bin Saud al-Thani, said on Saturday Gulf Arab states would try to meet that deadline by trying to remove obstacles to the project, including harmonizing payment systems and regulations.

Oman threw the single currency project into disarray in 2006 when it said it would not join by the 2010 deadline. It has since said it will not join at all.

Kuwait also cast doubt on the deadline when it broke ranks with its neighbors and severed its peg to the dollar last May, saying the weak dollar was fuelling inflation by driving up import costs.

(Writing by John Irish; Editing by Paul Bolding)

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