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GCC leaders approve Monetary Union as members seek to host Central Bank

The GCC leaders put their final seal on the Gulf Monetary Union on the concluding day of the two-day 29th summit yesterday but the question of the location of the Central Bank remained unresolved.

  • By Sunil K. Vaidya, Bureau Chief
  • Published: 23:46 December 30, 2008
  • Gulf News

  • The GCC leaders reviewed the functioning of the GCC common market and adopted a document containing principles, market requirements and objectives and mechanisms for implementation.
  • Image Credit: WAM

Muscat The GCC leaders put their final seal on the Gulf Monetary Union on the concluding day of the two-day 29th summit yesterday but the question of the location of the Central Bank remained unresolved.

"There are four countries staking a claim to host the GCC Central Bank," Mohammad Al Mazroui, assistant secretary-general for economic affairs, told Gulf News at the end of the summit on Tuesday.

He said the UAE, Bahrain, Qatar and Saudi Arabia were keen to host the GCC Central Bank.

He said he hoped a decision would be taken by year end.

Gold reserves

In reply to a question on gold reserves for the GCC Central Bank, Al Mazroui said "that is a matter to be pondered over later.

"We first have to decide on the location of the Central Bank, then the Central Bank and Monetary Council will have to decide on the gold reserves for the Central Bank," he said.

Oman had pulled out of the common currency in 2005 citing unpreparedness but had decided not to object to the other five members going ahead with it.

Ironically, it was during the 2001 GCC Summit in Muscat that the plan for the common GCC currency was mooted and it was given the final nod here in Oman yesterday without the participation of the hosts.

It was decided to speed up the creation of the Monetary Board to oversee technical requirements for Monetary Union. The proposed board will finalise details for setting up the Central Bank and the issuance of the single currency.

Common currency

Saudi Arabia's King Abdullah Bin Abdul Aziz proposed that the committees working on the GCC economic integration process should speed up their work and complete the whole process by September 2009 so as to benefit GCC nationals.

The leaders also reviewed the functioning of the GCC common market and adopted a document containing principles, market requirements and objectives and mechanisms for implementation.

Al Mazroui said that the common market draft proposed by the finance ministers went off smoothly and was adopted but some issues of revenue have to be sorted out as far as the Customs Union issue was concerned.

On the name for the common GCC currency he said there were some names that had come up. When pressed, he agreed that Khaleeji was ahead in the race.

Al Mazroui said that the railways project feasibility study was also given the approval along with the $7 billion (Dh25.69 billion) GCC power grid. "The power grid should be functional in the first half of 2009," he said.

He, however, added that the GCC finance ministers had shown concern about the cash flow.

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