Qatar casts doubt over monetary union deadline

Sheikh Hamad, pictured, has cast doubt over the 2010 deadline for the are unlikely to meet a 2010 deadline for monetary union. (Getty Images)

Gulf Arab oil producers are unlikely to meet a 2010 deadline for monetary union, Qatar's prime minister said on Saturday.

Speaking at a conference in Bahrain, Sheikh Hamad bin Jassim bin Jabr Al-Thani said the other states are also unlikely to meet the deadline.

Sheikh Hamad's comments are in stark contrast to the united statement Gulf Arab states put out at the end of last week's annual summit in Doha, in which the GCC remained to a 2010 target date for establishing a monetary union and single currency

The 2010 deadline is widely regarded as almost impossible to meet and many had expected a new date to be announced at the summit.

Gulf central bank governors and finance ministers had said on several occasions leading up to the summit that the 2010 deadline was unrealistic and would likely be revised.

Saudi finance minister Ebrahim Al Assaf said in October that GCC members were discussing the possibility of pushing the timetable further down the road.

While UAE central bank governor Sultan Nasser Al-Suweidi said earlier that month that the GCC is unlikely to have a single currency by 2015.

The timetable for the monetary union has been in doubt since Oman said last year it would skip the 2010 deadline over concerns that spending targets could constrain economic growth.

Plans received a further blow in May when Kuwait broke ranks and ditched the dinar's peg to the US dollar, claiming the rising cost of imports in non-dollar denominations was driving up inflation.

Gulf states had agreed to peg their currencies to the dollar in preparation for the introduction of a GCC single currency.

The remaining five states pegged to the dollar have come under increasing pressure to revalue or depeg their currencies as inflation soars across the Gulf.

Annual inflation in Saudi Arabia accelerated in September to 4.8%, the highest level in at least a decade, inflation accelerated to almost 14% in Qatar at the end of the third quarter, while inflation stood at 7% in Oman and 6.2% in Kuwait in September. In the UAE inflation hit 9.3% last year.

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