relaxing in Dubai

UAE pulls out of GCC Monetary Union. Bleak future for Khaliji Predicted

In an egoistic move, UAE has pulled out of the proposed GCC monetary union and said it will keep its currency pegged to the dollar, three weeks after it was announced that the bloc’s central bank will be based in Riyadh, Arabian Business reports.

Sultan Nasser Al Suwaidi, governor of the UAE central bank, said that the country will maintain its expansionary monetary policy and that the dirham’s exchange rate will remain pegged to the US dollar.

Apparently, UAE’s decision to withdraw was due to Riyadh being named as the headquarters of the regional central bank.

Analysts predict bleak future for the monetary union and Khaliji, the proposed single GCC currency.

The union would have combined the nations to form the fifth largest economy in the world. However, Oman pulled out in 2006 and now UAE in 2009.

Khaliji: Common Gulf Currency to launch in 2010


Khaliji: Common Gulf Currency to be launched in 2010.

The Gulf common currency is just 12 months away. Economists at the Dubai International Financial Centre have tentatively named the new common currency the “Khaliji”. Although the baptism is not yet officially approved, DIFC economists are hopeful that the proposed name will find favour with the decision makers.

“While the name does not associate or sound like any of the existing currencies of the Gulf States, it does reflect the attribute of the region to which all the states belong,” said Dr Nasser Al Saidi, chief economist of the Dubai International Financial Centre.