GCC plans monetary council

The Gulf Co-operation Council (GCC) will propose establishing a Monetary Council after the region's plan to adopt a single currency is ratified by three national parliaments.

The plan will be put forward at a meeting of central bank governors and finance ministers between September 15 and September 17, Naser Al Kaud, deputy assistant general for economic affairs at the GCC Secretariat, said from Riyadh yesterday. Saudi Arabia, the UAE, Qatar, Kuwait and Bahrain are pushing ahead with a monetary union after Oman pulled out last year.

The five states agreed in 2001 to form the European Union-style monetary union in 2010 to help boost regional trade.

The Monetary Council would be a precursor to a central bank for the region, deciding the value at which the Gulf currencies should enter the single currency and harmonising monetary policy.

"We are suggesting it. I am not sure if they will agree," said Al Kaud. "It may help start the council sooner."

Al Kaud said earlier Gulf finance ministers would discuss a draft Monetary Union Treaty and Monetary Council Charter that was approved by central bank governors in Doha, Qatar, in June.

"If finance ministers approve the draft agreements it will be a major step to establishing the monetary union, it will give us credibility," he said.