Four member states of the Gulf Cooperation Council signed an accord in the Saudi capital yesterday to create a monetary union, a GCC spokesman said.
The Prime Minister and Foreign Minister H E Sheikh Hamad bin Jassem bin Jabor Al Thani signed the agreement on behalf of Qatar.
GCC Secretary General H E Abdulrahman Al Attiyah and their excellencies the finance ministers of the GCC Monetary Union member states — Bahrain, Kuwait, Qatar and Saudi Arabia — and the governors of the central banks in the member states attended the signing ceremony.
The agreement is the first step toward the establishment of the Monetary Union to pave the way for a GCC Central Bank to create the single Gulf currency.
It comes as a confidence-building measure after the shock decision by the UAE to leave the plan in protest after a May 5 decision to base the joint central bank in the Saudi capital Riyadh.
In doing so, the UAE broke ranks with Saudi Arabia, Kuwait, Qatar and Bahrain and stirred doubts whether the project would proceed or, if so, whether the new currency bloc would be of much benefit to the energy-exporting region.
“For the sceptics, the signing is not that important. It should be seen, however, as another step forward and proof to those that say the union cannot move ahead,” said John Sfakianakis, chief economist at HSBC’s Saudi affiliate.
The UAE withdrawal was not the first setback. Oman opted out in 2006 and earlier this year the six-nation GCC abandoned an initial 2010 deadline for issuing common notes and coins.
Some analysts had questioned whether the withdrawal of the UAE could derail the long-troubled project.
In 2001, the GCC states had agreed to forge a monetary union similar to that of the European Union.
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