GCC approves draft deal on monetary union

18 September 2008
GCC finance ministers have approved a draft agreement on the general structure of a proposed monetary union but deferred a decision on the location of a central bank.

While finance ministers from the six GCC states have previously expressed solidarity on the goal of currency union by 2010, that enthusiasm has wavered over the past 12 months, with leading figures and economists questioning the benefits of implementing a single currency.

Gulf states are anxious to progress the deal with final approval expected at the next GCC meeting to be held in Oman later in 2008, along with a decision on the central bank location.

“We are beginning to see that if we don’t agree on these issues, future storms may be more difficult to deal with,” says Youssef Hussein Kama, Qatar’s minister of finance and economy.

Investment bank Standard Chartered says despite the progress made, GCC officials are openly acknowledging the possibility that the common currency might not be introduced by 2010.

It adds that the lack of news on the location of the central bank was a sign that at least two countries were competing for rights to host the bank.

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