Commodity Online
RIYADH : Saudi Arabia on Wednesday said, Gulf Arab states will reconsider a 2010 target for monetary union as the single currency plan is hindered by economic growth and soaring inflation.

Speaking to reporters here Saudi Arabia’s central bank governor Hamad Saud Al-Sayyari said, 2010 is “too soon” as gulf economies surge on a near seven-fold rise in oil prices since 2002 and inflation jumps to record highs.

“The programme will be discussed and reconsidered at a joint meeting with finance ministers this autumn,” he added.

Central bankers from Saudi Arabia and four of its neighbors agreed at a meeting this month to create the nucleus of a joint central bank next year, but signaled the new common currency would not be in circulation by the agreed 2010 target.

The governors are set to meet with Gulf finance ministers to approve a final draft of the monetary union deal this September. They will also discuss a draft agreement to set up a monetary council that will be the first leg of a central bank.

The currency plan has already been thrown into disarray twice after Oman decided in 2006 not to join and Kuwait severed its dollar peg in May 2007.

The GCC, a loose political and economic alliance, also includes the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman.