GCC monetary authority soon

Four Gulf nations will launch their monetary authority to set up a joint central bank at the end of February as part of an historic pact to create the Middle East's first currency union, a senior Gulf official was quoted as saying yesterday.

Saudi Arabia, Kuwait, Qatar and Bahrain, members of the six-nation Gulf Co-operation Council (GCC), will officially launch their monetary union on January 23 following its final summit approval last month, said Nassir Al Qaoud, GCC's Deputy Assistant Secretary General for Economic Affairs.

"The monetary union will be enforced on January 23, a month after the fourth ratification document was deposited by the members with the GCC Secretariat," Qaoud told the Arabic-language paper Al Riyadh.

"As for the Gulf Monetary Authority (GMA), which will pave the way for the creation of the GCC central bank, it will start operating at the end of February," he said.

Al Riyadh said Qaoud was reacting to newspaper reports that the central banks of the four countries halted lending operations at the beginning of 2010.

"Those reports carried wrong information that the central banks would stop lending at the start of 2010… this process requires several procedures, which will be the responsibility of the GMA," Qaoud said.

"Any way, most central banks in those countries normally do not lend to the government, which means these reports do not carry any new information," said Qaoud.

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