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Sun 7 Nov 2010 11:42 AM

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Dollar fall unlikely to lead to peg rethink - GCC head

GCC secretary general is happy with the progress of a plan for a monetary union for the region

Dollar fall unlikely to lead to peg rethink - GCC head
Abdulrahman Al Attiyah is the secretary general of the GCC (Getty Images)

The drop in the value of the US dollar is unlikely to lead Gulf Co-Operation Council (GCC) countries to rethink their peg to the currency, the GCC secretary general said on Sunday.

The dollar's slide has caused concern among oil producers as it pushes down the value of their dollar-denominated oil revenues while the price of their commodity imports, such as grains, have been increasing.

When asked whether the drop in the US dollar was pressuring Gulf Arab states to consider other solutions for their currencies, such as depegging, Abdulrahman Al Attiyah told reporters on the sidelines of a conference he did not expect such a move.

"In reality we do not think so... I do not think matters will reach this stage of thinking," he said.

He also said he was happy with the progress of a plan for a monetary union for the region, adding he hoped the UAE would re-join the project.

The UAE abandoned the plan in May 2009 withdrawing in protest against placing the forerunner of the future joint central bank in Riyadh.

"The Emirates is very important. I consider the Emirates a cornerstone of the Gulf monetary union as the second largest economy in the Gulf," said Attiyah, adding he was happy with the progress of the plan.

"We hope that one day Emirates will be part of it," he said.