Gulf central bankers yesterday agreed to create the nucleus of a joint central bank next year in a major step forward for a monetary union but signalled that a new common currency would not be in circulation by an agreed 2010 target.

Central bank governors from the six-member Gulf Co-operation Council (GCC) yesterday laid out a roadmap leading towards common monetary institutions before 2010.

"This is a very big step forward," said Salim Al Gudhea, head of the monetary union unit at the GCC Secretariat-General.

The timetable calls for the central bank draft proposal to be approved by finance ministers at a meeting in September and for Gulf rulers to sign a final deal in November, Gudhea said.

"This is the first time that the draft is going up in the hierarchy rather than back to the technical committee," he said. (Reuters)