DUBAI, 5 September 2004 — The UAE has offered to host the central bank of the Gulf Cooperation Council (GCC) as the six member states begin to structure the broad framework to launch a unified currency in 2010, a report published in Gulf News said.
The GCC central bank is to be established in mid-2006 according to current schedules and the UAE has thrown its hat in the ring. It is expected to present its offer at the GCC meeting to be held in Abu Dhabi in December, the report said.
The report quoted a source at the GCC as saying that the UAE has formally offered to host the central bank, but he did not rule out other bids by the five other GCC members.
The GCC authorities have studied two options - setting up a monetary coordinating authority linked to the secretariat, or assigning GCC member states’ central banks to monitor the monetary policy, it said.
The source confirmed the secretariat was most likely to go the GCC central bank route. Furthermore, a technical unit has been set up by the secretariat to study details of how such an entity can be established.
Once the central bank is created, the Gulf regulatory banking authority will adopt a single monetary policy for all GCC states. The GCC central bank could be structured along the lines of the European Central Bank. There are still several requirements that must be met to enable GCC member states to issue their unified currency in 2010.
“As part of the administrative aspects, agreement must be reached now to set up the central bank as well as agreeing on the bank’s headquarters, which could be based in another Gulf city other than Riyadh where the GCC general secretariat has its offices,” the source quoted by the newspaper said.