Qatar affirms single currency commitment

Euro sovereign debt crisis likely to delay the introduction of a common currency.
Qatar affirms single currency commitment
PROJECT PROGRESSING: Qatar is committed to plans for a Gulf monetary union and the project is progressing, according to the countrys central bank governor. (Getty Images)
By Bloomberg
Mon 28 Jun 2010 09:03 PM

Qatar’s Central Bank Governor Sheikh Abdullah bin Saud al Thani said Qatar is committed to plans for a Gulf monetary union and the project is progressing, dismissing concerns that the European Union debt crisis may derail it.

In an interview on Monday, in Basel, Switzerland, al Thani said: “We are committed, it’s going forward, we are doing the homework, and we are looking forward to having the currency as soon as things are ready."

He declined to set a deadline.

The euro sovereign debt crisis is likely to delay the introduction of a common currency by Saudi Arabia, Kuwait, Qatar and Bahrain, Emirates Business 24/7 reported last month citing a survey of economists in the region. It didn’t give details of the poll.

Kuwaiti Foreign Minister Sheikh Mohammed al Sabah said problems with the EU currency union may lead to a “pause” in the Gulf plan, Kuwait News Agency said May 24, and Bahrain has voiced similar concerns.

Saudi Arabia’s central bank Governor Muhammad al Jasser, who is also chairing the project, said on May 24 there had been no change in strategy as a result of the Greek debt crisis. The currency should have been in place this year under the original timetable. No new date has been set.

Al Thani said he is not concerned about fluctuations in the euro because Qatar’s reserves are “balanced,” with the largest denomination in dollars.

The governor said there are no current plans to issue more sovereign bonds after 10 billion riyals ($2.7 billion) were sold earlier this month. He forecast economic growth of 18 percent this year, and inflation of 1 percent.

Qatar’s banks don’t have “significant” loans to Dubai World, the state owned company restructuring $23.5 billion in debt, and the financial industry’s non performing loans are “very stable” at about 1.8 percent of all credit, he said.

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