Central banks of the world, prepare to welcome a new addition to the family: the Gulf central bank.
Its leaders have just been announced by the new joint monetary council, in what will probably be seen as the inaugural meeting of the new joint central bank. Jurisdiction will cover Saudi Arabia, Qatar, Kuwait and Bahrain. Reuters reports the bank chairman as Saudi central bank chief, Dr Muhammad Al-Jasser. His deputy will be Bahrain’s central bank chief Mr Qassim Mohammed Fakhro.
With leaders chosen, meetings underway and an ultimate head office location of Riyadh (see map), what more is required? “There are certain legislative and financial measures that have not been completed” for the monetary union, Kuwait central bank governor Sheikh Salem Abdulaziz Al-Sabah told a news conference. Today’s meeting is expected to approve plans and a timeframe for the new institution. Read more
A common single currency for the Gulf is a step closer after the central banks of Saudi Arabia, Qatar, Bahrain and Kuwait were asked to stop lending to the public sector in preparation for a unified regional central bank. It is not known whether bonds are considered part of the public sector loan portfolio.
The four states are part of the Gulf Co-operation Council, which also includes Oman and the United Arab Emirates. The latter two are not planning to join monetary union at this stage.
Apparently, the draft GCC common monetary union agreement prohibits the central banks Read more
Dubai’s woes make it unlikely the UAE will rejoin the plan for Gulf monetary union any time soon.
The Gulf co-operation council – Saudi Arabia, Kuwait, Qatar and Bahrain, the UAE and Oman – will meet over the next three days in Kuwait, where a single regional currency is likely to be discussed. The UAE pulled out of the plan in May in protest at the Saudi siting of the proposed joint central bank. Kuwait, about to take over presidency of the GCC, has said the location would not be reviewed. Read more