UAE pulls out of GCC monetary union pact

The UAE has decided not to take part in the proposed monetary union agreement among the Gulf Co-operation Council (GCC) states, an official source at the UAE Foreign Ministry said yesterday.

The source said the General Secretariat of the GCC was officially notified yesterday of the UAE's decision.

"The UAE extends its best wishes for success to those GCC member states that will join the monetary union agreement," the source said.

The source further said the UAE will continue to act in the best interest of the citizens of member states and will also carry out its role as a founding member to help it achieve its mission and goals.

"The UAE's past record of implementing the GCC's resolutions is strong proof of its belief in joint GCC action," the source concluded.

Meanwhile, Central Bank Governor Sultan bin Nasser Al Suwaidi, commenting on the UAE's monetary policy, said the country will continue to maintain its expansionary monetary policy without any change.

He said that the country will also maintain the dirham's peg to the dollar.

Analysts said yesterday that the UAE's decision to pull out of the GCC Monetary Union was likely due to the country's unhappiness at the selection of Riyadh in the Kingdom of Saudi Arabia, as the location for the headquarters of the proposed GCC Central Bank

The UAE was the first country to officially request, in 2004, the hosting of the planned central bank of the GCC as part of arrangements for entry into the council's monetary union.

The UAE had expressed "reservation" when the announcement regarding the headquarters was made on May 5 by GCC Secretary General Abdulrahman Hamad Al Attiyah in Riyadh.

Riyadh is also the location of the GCC General Secretariat.

The UAE does not currently host the headquarters of any organisation or institution that is affiliated with the GCC. (Wam and Staff)

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