Central bank governors cemented moves towards monetary union yesterday but said more efforts were needed to curb soaring inflation, which threatens to undermine the project. Bankers of the six-member Gulf Cooperation Council (GCC) meeting in Jeddah reached agreement on the charter governing the monetary council that will form the nucleus of a future common central bank. Qatar’s Central Bank Governor H E Sheikh Abdullah bin Saud Al Thani, who chaired the meeting, said the council had “completed 85 percent” of what it needed to achieve a single currency. But inflation across the Gulf has been rising, mainly because of surging demand for real estate as the economy has expanded, spurred by a near five-fold increase in oil prices since 2002. “Rising inflation will require extra efforts in order to stabilise our economies and provide the appropriate environment in order for monetary union to be launched and to succeed,” Sheikh Abdullah said. He said Gulf central banks had succeeded in resisting calls for them to revalue their currencies or drop their pegs as the dollar weakened. The GCC agreed in 2001 to launch a single currency by 2010. But that deadline has lost credibility over the past two years with Oman’s decision to withdraw from the monetary union project and Kuwait’s to drop its dollar peg. The Pen

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