Gulf single currency plan is delayed

Property investors with interests in the Gulf concerned about exchange rates will have to wait a while longer for a planned single currency to take effect. Bankers from the region have agreed to a joint central bank but indicated a new common currency would not be active by an agreed 2010 target.

Inflation has threatened the idea in recent months, but on Monday officials unveiled a plan towards the unification of money institutions to put the scheme back on track. Shaikh Abdullah Bin Saud Al Thani, quoted by Gulf News, said:

“2010 will be the date for the creation of a monetary council or a monetary authority for the Gulf Cooperation Council countries.”

High inflation remains and issue, however, and no further details have been given on when a single currency will finally emerge. The idea of a single monetary system for a set of Gulf states was first proposed in 2002.

Concern about the area’s heavy economic dependence on oil first prompted calls for cooperation.
Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and UAE were the six initially involved, but Oman pulled out of the plan in 2006 and Kuwait severed its dollar peg last year.

It is thought a single currency would bring great stability to the region and promote widespread growth, while better controlling inflation in the area.