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GCC single currency 'unlikely by 2015'

DUBAI — Gulf Arab oil producers are unlikely to have a single currency by 2015, five years later than the six states had agreed, the central bank governor of the United Arab Emirates said in remarks published yesterday.

The UAE, Saudi Arabia Kuwait and three neighbours had agreed to keep their currencies pegged to the dollar until monetary union in 2010.

With the deadline in doubt, markets have been betting that more countries in the region could revalue their currencies, or abandon the pegs altogether as Kuwait did in May, blaming the dollar's slide on global markets for rising inflation at home.

Unlike in Kuwait, inflation in the UAE is driven by domestic factors such as rents, Sultan Nasser Al Suweidi said in an interview published in a magazine.

He ruled out a revaluation in "the near future", even though the timetable for monetary union could slip by more than five years, according to the magazine which interviewed Suweidi on Sept. 17. "...it is something we cannot see (taking) place even in 2015," he said. It was the bleakest assessment yet by a Gulf central banker of the timetable for monetary union, which has been in doubt since Oman said last year it would skip the 2010 deadline to avoid being bound by spending targets.