Monetary pact heralds move towards single currency
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Gulf states meeting for a two-day summit in Kuwait have agreed to set up a Gulf monetary council early next year as a first step towards the establishment of a central bank and the creation of a single currency.
AFP - A Gulf monetary union pact took effect on Tuesday, the Kuwaiti finance minister said in a move that brings the energy rich region closer towards launching its own single currency.
"The Gulf monetary union pact has come into effect," the finance minister, Mustafa al-Shamali, was quoted as saying by the official KUNA news agency.
"Accordingly, GCC central bank governors will work out a timetable for the establishment of the Gulf central bank to ultimately launch the single currency," said Shamali.
Under the pact, a Gulf monetary council to be established early next year would develop into a central bank which would then take the required measures to issue a single currency.
The Kuwaiti minister's announcement came as GCC leaders were preparing to end their two-day annual summit in Kuwait City during which they discussed a number of economic integration projects and political issues.
Bahrain, Kuwait, Qatar and Saudi Arabia have signed and ratified the pact while the other two members -- Oman and the United Arab Emirates -- have opted out of the union.
The UAE, the Gulf's second largest economy, withdrew from the union over objections to selecting the Saudi capital Riyadh as the base for the future Gulf central bank.
Oman said it cannot meet the union's prerequisites.
Shamali expressed hope however that the two nations will join the monetary union "in the near future."