Oman central bank chief: Single Gulf currency is inevitable

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The Gulf is on track to have a single currency, according to the executive president of Oman’s central bank.

“Serious measures” are being taken to achieve this goal, Asharq Al Awsat quoted Hamood Sangour al-Zadjali as saying. But although the bank chief sees the transition as inevitable, Oman is not one of the countries pushing for the common currency.

Creating a single currency among the Gulf Cooperation Council states – Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and the United Arab Emirates – has been on the table since it was laid out as an objective in the early 1980s. Since 2010, Qatar, Saudi Arabia, Kuwait and Bahrain have formed a joint monetary council.

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If a single currency does move forward, it is believed that it would be pegged either to the United States dollar or to a basket of foreign currencies. Currently, the amount of trade between Gulf countries and the European Union is larger than with the U.S., which might dissuade the GCC from pegging the single currency to the dollar.

The UAE distanced itself from the plan in 2009 and Oman did so in 2006. Reuters reports that many regional bankers are skeptical that the measure will move forward anytime soon, as the Gulf nations continue to struggle with low oil prices.

GCC countries have begun implementing serious economic reforms over the past year, including subsidy cuts and the announcement of value-added taxes. Saudi Arabia also cut the salaries of ministers and shura council members.

Source: stepfeed.com

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