ArabianBusiness.com - Middle East Business News
Sunday, 05 July 2009 07:10 UAE time

YOUR DIRECTORY /

| Share |

Single currency needed to fight financial storms

by This email address is being protected from spam bots, you need Javascript enabled to view it  on Wednesday, 17 September 2008
RESOLVE DIFFERENCES: Kamal has called on Gulf states to speed up the creation of the single currency, (Getty Images)

Gulf Arab states must speed up moves towards a common currency or face intensifying financial storms, Qatar's finance minister said as the region's finance leaders sought to resolve key details on Wednesday.

"We are beginning to see that if we don't agree on these issues, future storms may be more difficult to deal with," said Qatar's Minister of Finance and Economy, Youssef Kamal, adding the US financial crisis underscored the region's need for common structures.

He was speaking at a rare joint gathering of Gulf Arab finance ministers and central bank governors, to be attended by IMF director general Dominique Strauss-Kahn.

Story continues below
advertisement

As evidence grew that the Gulf's oil-fuelled economies are overheating, bankers of the six-member Gulf Cooperation Council (GCC) meeting in Jeddah meeting one day earlier said they had reached agreement on the charter governing the monetary council that will form the nucleus of a future common central bank.

But key terms to any accord were left unresolved, such as the location of a common central bank and the timing for the new currency, with central bankers deferring to the finance ministers or to Gulf rulers, due to meet in November.

Inflation across the Gulf has been rising, mainly because of surging demand for real estate in an economy spurred by a near five-fold increase in oil prices since 2002.

The Gulf's status as a growth region has shielded it so far from any direct impact from the U.S. financial crisis.

Arab stocks plummeted in recent days due to fear of fallout stemming from the collapse of Lehman Brothers, but rebounded strongly on Wednesday after the Federal Reserve rescued insurer AIG.

The GCC agreed in 2001 to launch a single currency by 2010.

But that deadline has lost credibility over the past two years with Oman's decision to withdraw from the monetary union project and Kuwait's to drop its dollar peg.

Gulf Arab central bank governors said on Tuesday they saw little systematic risk from the US crisis as their exposure to Lehman and US sub-prime assets was limited.


For news updates sign up for our newsletter
| Share |


READERS' COMMENTS

Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.

Click here to post a comment


Add your Comment
All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *
(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments


Please click post only once - your comment will not be published immediately.


MORE FROM ARABIANBUSINESS.COM

SHARE PRICE CHECK

RELATED LINKS

  1. Gulf Cooperation Council (GCC)»
  2. Qatar Central Bank»

 EMAIL ALERTS

  1. Gulf Cooperation Council (GCC)

  2. Qatar Central Bank

  3. Politics & Economics


CURRENCY CONVERTOR


READER COMMENTS

Reader Comments (24 hrs)

  1. UAE raises minimum salary limit for expats with family 16
    04 Jul ' 09 at 20:24
    Why would anyone ever subject his family to so much indignity and humiliation by sharing a house, bathroom, kitchen with other...  More »
  2. Canada seeks to save man from Saudi death sentence 3
    04 Jul ' 09 at 18:10
    I always wondered how Islam promotes itself as a peaceful religion. With local laws in a place like Saudi alongwith the numerous...  More »
  3. Bankruptcy law shake-up call after Dubai boss flees 2
    04 Jul ' 09 at 19:32
    @GilbertBy what you say in when you compare your style of business operations with that of Simons, it seems you are convinced that...  More »
Read all user comments >

BUSINESS FEATURES

Kuwait’s democracy troubles Gulf Arab rulers

Kuwait's partial democracy rings alarm bells for Kuwait's rulers.

Arab states gloat at Iran strife, but wary of its spread

US-allied Arab states enjoying the violent protest over president Ahmadinejad's re-election, fear its fallout.

Gunmen stalk diamond diggers in Congo

Diggers in Congo's biggest diamond mine fear encountering the gunmen known as ‘suicidaires'.

BUSINESS INTERVIEWS

Wild Wadah

Being Al Jazeera is no easier today than it was when it launched, the network's director general Wadah Khanfar tells Arabian Business.

The optimist

Veteran diplomat and Nobel Prize winner Martti Ahtisaari makes the case for peace in the Middle East.

'The worst is yet to come'

Former World Bank chief James Wolfensohn warns that the global economy is facing a long road to recovery.

MORE FROM ARABIANBUSINESS.COM