Return to monetary union unlikely

The UAE is unlikely to return to the planned GCC monetary union, the Central Bank Governor Sultan al Suwaidi said yesterday. He said he did not see a compromise deal that would allow the country to rejoin proposals for the formation of a single currency for the GCC. "We have certain concerns, certain issues, with the GCC monetary union so therefore we don't want to act as a stumbling block to this," Mr al Suwaidi said while attending the annual meeting of the Council of Governors of Arab Central Banks and Monetary Agencies in Abu Dhabi.

On May 20, the UAE became the second country in the six-member GCC to pull out of the planned monetary union following the withdrawal of Oman two years ago. Its withdrawal was a significant setback and followed the decision to base a future regional central bank in Saudi Arabia's capital Riyadh. Mr al Suwaidi said it was not the "right time" for the UAE to re-enter the plans. "It's not a matter of compromise," he said. "It is just a brother who decides to stay behind and let his other brothers go ahead and achieve the union as fast as possible."

Next year had been agreed as a target date to launch the monetary union. On Sunday, however, Kuwait's central bank governor, Sheikh Salem Abdulaziz al Saba, said the union should be implemented in phases. Sheikh Salem said the administrative plan should focus on the institutional requirements of the union including financial, trade, statistical and common market policies. He also said printing banknotes for the new currency would take three years.

The GCC states have agreed on a number of monetary union requirements but failed to reach consensus on others. tarnold@thenational.ae