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Gulf States will Stick to 2010 Deadline for Currency Union

DUBAI — Five Gulf Arab countries seeking to adopt a euro-style single currency are sticking to next year’s deadline for monetary union, Qatar’s central bank governor said.

“We will still continue with 2010 and we’ll be working hard to achieve our goals and objectives,” Governor Abdullah Saud Al Thani said in an interview in Singapore today. Gulf Cooperation Council members in March abandoned the 2010 target and GCC Secretary-General Abdul Rahman Al Attiyah yesterday said a new deadline hadn’t 
been set.

Qatar, one of the Gulf states that was vying to host a united Gulf central bank, was also happy with the selection of the Saudi Arabian capital of Riyadh for the institution’s headquarters, 
Al Thani said. “We will be working hard to accomplish the GCC union,” the governor said.

Five countries planning to launch a single currency decided on May 5 to locate the monetary council, what will later become the unified central bank, in Saudi Arabia, the Arab world’s largest economy. The United Arab Emirates, which had also been competing to host the bank, said they expressed ‘reservation’ at the selection, according to state-run WAM news agency.

A GCC official said in March that the 2010 deadline for reaching monetary union would have to be extended as too many technical issues remained.

The drive to create one currency and drop pegs to the dollar has waned in recent months as Gulf central banks increasingly acted independently of each other to solve liquidity problems caused by the global financial crisis. Little progress had been made since September when the central banks approved the agreement for 
monetary union. The original 2001 agreement to set up the new currency included Saudi Arabia, the UAE, Qatar, Oman, Bahrain and Kuwait. Oman pulled out in 2007.