Four Gulf states pursue monetary union plan

Saudi Arabia and three of its partners in the six-nation Gulf Co-operation Council (GCC) met in Riyadh this week to discuss measures to push ahead with plans to create the world’s second major monetary union, newspapers said on Wednesday.

The GCC Monetary Council, which was launched earlier this year to pave the way for a common central bank, debated procedures to set up the “organisational and institutional” framework of the council, the Saudi daily Aleqtisadiah said in a report from Riyadh.

Governor of the Saudi Arabian Monetary Agency (Sama), Mohammed Al Jassir, who has been elected the council’s chairman, headed Monday’s meeting that was also attended by central bank governors from Kuwait, Qatar and Bahrain.

“The council stressed the need for the central banks in member states to achieve more convergence in monetary policies and alignment in national currency exchange rates,” the paper quoted a statement as saying.

It said the council, holding its second meeting this year, also discussed the creation of an executive authority to chalk out plans for the currency union and implement the council’s decisions.

The four GCC members launched the long-awaited currency union at the start of 2010 despite the withdrawal of the UAE and Oman.

The union targets a single currency within the next five years, but officials and experts have ruled out such a currency will materialise on time.

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