Monetary union: Gulf Central Banks urged to step up efforts

Doha: Gulf Central Banks will need to step up efforts to achieve monetary union as regional economies come under mounting pressure from interest rates and exchange policies, Qatar's Governor said here on Monday.

Shaikh Abdullah bin Saud al Thani urged Gulf Central Banks to pursue additional consultations and better coordination of their joint committees in a bid to achieve the necessary regulatory convergence for the creation of the single currency.

"Our economies have been facing mounting pressure over the past year due to interest rates and exchange policies. Studies show that these pressures will continue during this year. Henceforth Gulf Banks must enhance negotiations and coordination of their financial policies. This would help us achieve the currency union," he said.

"The committees on monitoring prices and payment system have worked very well in the direction of a better coordination. But the technical committee together with the legal division will have to face bigger challenges such as finding an agreement over the economic standards as well as the legislative and organisational structures for the monetary union."

Shaikh Abdullah was addressing the bi-annual meeting of the region's Central Banks, which will conclude on Monday. The event is aimed to revive the 2010 deadline for the creation of a single currency and try to remove obstacles.

According to a source close to the meeting, Gulf Central bankers may discuss the signing of a 'union currency agreement' as a precondition to the creation of the currency union.

The agreement may pave the way for the creation of Gulf Currency Council or a Gulf Central Bank to set the framework for the creation of the monetary union, the source said.