KUWAIT CITY: Finance ministers of Gulf states are expected to approve a proposal to set up a monetary council at a meeting in Saudi Arabia today, but the launch date for a single currency remains unclear.

The monetary council, agreed in principle by central bank governors of the Gulf Cooperation Council (GCC) states in 2006, would be the forerunner for the GCC central bank, which will issue the single currency. The gathering in Jeddah will be preceded by a two-day meeting of the bloc’s central bank governors.

They will discuss the location of the monetary council and review the latest monetary and fiscal developments in member states, GCC Secretary General Abdulrahman Al-Attiyah said in a statement. Decisions by the ministers and governors become effective only if approved at a summit of GCC leaders due to be held in Oman toward year’s end. The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Setting up a monetary council is seen as an important step forward on the road to monetary integration between the GCC states, but the self-imposed target date of 2010 to launch a single currency appears unrealistic.

Establishing the monetary council is “very far from signaling that the start date for the new currency is just around the corner,” said the National Bank of Kuwait in a report, citing a lack of solid political backing.

“In principle at least, this means that a new pan-GCC institute could be in operation by 2009,” the NBK report said.