KUWAIT CITY, 24 May 2007 — Oman’s central bank Gov. Homud Al-Zidjali said yestersday that the sultanate had decided not to take part in a planned single currency for Arab states in the Gulf.
“Our decision is not to participate in the Gulf monetary union ... because we do not want to restrict our monetary and fiscal policies at present,” Zidjali said at a banking conference in Kuwait.
Oman told its Gulf Cooperation Council partners last year that it was unable to meet the legislative and technical requirements for monetary union by the target date of 2010, but would join at a later date.
“At present we will not join. Later when the single currency comes into existence, then maybe,” Zidjali later told reporters. He said Oman believes that meeting the GCC monetary union criteria may have a negative impact on its development plan.
Besides Oman, the GCC groups Bahrain, Kuwait, Qatar, the United Arab Emirates and Saudi Arabia.
GCC leaders decided at their summit in 2001 to launch their monetary union and single currency in 2010, but economists have cast doubt over their ability to meet the date especially after the Omani move and Kuwait’s decision on Sunday to peg the dinar to a basket of currencies instead of the dollar.
Saudi Arabia said yesterday that time was running out for the planned launch of a single Gulf currency in 2010, after Oman said it would not join and Kuwait de-pegged its currency from the dollar. “It is true that the time now is short and we need exceptional efforts to achieve” monetary union and single currency by 2010, the head of the Saudi Arabian Monetary Agency, Hamad Al-Sayari, told a banking conference in Kuwait.
Leaders of the GCC states decided at a summit in 2001 to launch a monetary union and single currency by 2010.
The plan has however met with a number of snags regarding technical, legislative and fiscal policies required for the planned union between the six GCC states.
Economists and analysts said Kuwait’s move made it highly unlikely the GCC would be able to fulfill its hope for a single currency by the 2010 target date.
The GCC groups Bahrain, Kuwait, Oman, Qatar, the UAE and Saudi Arabia.
