Gulf sin­gle cur­rency in­evitable, says Oman CB chief

Kuwait Times - - BUSINESS -

The cre­ation of a sin­gle cur­rency in the Gulf Arab re­gion has be­come in­evitable and is only a mat­ter of time, the ex­ec­u­tive pres­i­dent of Oman’s cen­tral bank was quoted as say­ing. Oman is not one of the coun­tries push­ing for a com­mon cur­rency, but “se­ri­ous mea­sures” are be­ing stud­ied to achieve it, the Saudi Ara­bian-owned Al Sharq al-Awsat news­pa­per quoted Hamood San­gour al-Zad­jali as say­ing in a state­ment.

Omani of­fi­cials were not im­me­di­ately avail­able on Mon­day to com­ment on the re­port, and it was not clear whether Zad­jali’s re­marks sig­nalled any new mo­men­tum for the re­gion’s sin­gle cur­rency pro­ject. The cre­ation of mone­tary union be­came a pri­mary ob­jec­tive of the six mem­bers of the Gulf Co­op­er­a­tion Coun­cil in the early 1980s. Four of them - Qatar, Saudi Ara­bia, Kuwait and Bahrain - formed a joint mone­tary coun­cil and a fore­run­ner to a Gulf cen­tral bank in March 2010.

But the euro cri­sis and a lack of po­lit­i­cal will have slowed the pro­ject. Oman with­drew from the plan in 2006 and the United Arab Emi­rates pulled out in 2009. Many bankers in the re­gion say pri­vately that in­tro­duc­tion of a sin­gle cur­rency re­mains un­likely for the fore­see­able fu­ture, given tech­ni­cal dif­fi­cul­ties and the fact that GCC states are strug­gling with low oil prices, which are hav­ing vary­ing im­pacts on their economies.

Saudi Ara­bia has slowed sharply and has been forced into painful fis­cal re­forms, while Qatar and Kuwait, with rel­a­tively strong state fi­nances, have come un­der less pres­sure. — Reuters

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