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Tue 30 Mar 2010 03:04 PM

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Saudi central bank chief named Gulf monetary union head

Al-Jasser will be council's first chairman and Bahrain cenbank governor his deputy.

Saudi central bank chief named Gulf monetary union head
BANK BOSS: Muhammad Al-Jasser, head of the Saudi Arabian Monetary Agency, will be the councils first chairman. (Getty Images)

Saudi Arabia's central bank chief was named on Tuesday as head of the Gulf monetary council, a precursor to a planned Gulf central bank, underscoring Saudi dominance in the single currency project.

Muhammad Al-Jasser, head of the Saudi Arabian Monetary Agency, will be the council's first chairman and Rasheed al-Maraj, the central bank governor of Bahrain, will be his deputy, Jasser said at the council's inaugural meeting.

The council comprises the four Gulf states working on creating a single currency – Saudi Arabia, Bahrain, Qatar and Kuwait – and is expected to lay the foundations for a regional central bank as well.

The UAE dealt the project a blow when it quit in May 2009 over a decision to locate the council in the Saudi capital, fearing it could give Saudi Arabia more control over the union. Oman withdrew in 2006.

Jasser said on Tuesday that the monetary council would not set a deadline for the launch of a common currency, which has been under discussion for a decade.

GCC Secretary General Abdulrahman al-Attiyah reiterated hopes that the UAE and Oman would rejoin.

"We hold on to the hope of completing the monetary union with memberships of the two brotherly states of the UAE and Oman. The membership would represent a crucial addition to the monetary union," he said at Tuesday's meeting.

Both countries have said they were not considering rejoining the monetary council.

Jasser also warned the Gulf Arab region "not to fall into a trap of excessive expectations" about the monetary union.

"It will not solve other economic problems and handicaps that have to be dealt with through other economic channels that are not within the council's and the upcoming central bank's responsibilities and prerogatives," he said.

A Reuters poll forecasts Gulf states, which mostly peg their currencies to the dollar, will not adopt a common unit until 2015.(Reuters)

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