By Rob Corder
Finance Minister says that a proposal for the mechanisms of a single currency will be agreed in June.
Bahrain's Finance Minister has revived hopes that a GCC single currency could still be launched by its 2010 deadline with an announcement that a draft proposal for the unification will be completed soon.
GCC central bank officials will meet at the end of June to decide the name of the new currency, its denominations and the mechanisms for converting from current currencies.
Sheikh Ahmed ibn Mohammed Al-Khalifa said that the plan to launch the single currency was on track for its planned launch in January 2010, despite recent reports that say the project is faltering.
He said that the GCC are trying to meet financial criteria for the unification including working towards a framework of rules relating to inflation, bank interest rates, and budget surpluses and deficits.
Senior banking officials agree that there is still hope for the single currency. Saudi British Bank's chief economist John Sfakianakis, speaking to Saudi daily Arab News, said that it is still possible for GCC states to meet the 2010 deadline. But he called on Saudi Arabia to talk the lead. "Saudi Arabia, as the largest economy in the GCC, should be the leader and show its strength in order for the deadline to be met," he told the newspaper.
The first signs of trouble for monetary union were seen in December when Oman said it was not committing to the 2010 deadline.
This month, Kuwait announced that it was dropping its peg to the US dollar - a monetary rule that has bound GCC currencies together for several years.
That move prompted Merrill Lunch Analyst Emma Lawson to conclude that an announcement of a delay "seems inevitable at this stage."
Since the Kuwait announcement, both the UAE and Qatar have voiced their continuing commitment to the 2010 deadline.
Last week, Qatar's Central Bank Governor, Sheikh Abdullah bin Saud al-Thani, said: "We will continue to stick to the Gulf monetary union and coordinate with the others."
In the same week, UAE Central Bank Governor Sultan Nasser al-Suweidi insisted, "Monetary union still stands."