Gulf currency has become a matter of time: Oman official

RIYADH: The creation of a single currency in the Gulf region has become inevitable and is only a matter of time, said Hamood bin Sangour Al-Zadjali, executive president of Oman’s central bank.
Oman is not one of the countries pushing for a common currency, but “serious measures” are being studied to achieve it, Asharq Al-Awsat quoted him as saying.
According to the report, Al-Zadjali clarified that Oman’s central bank will not discourage local banks willing to expand into Saudi Arabia or other Gulf states from opening up new regional branches.
Gulf countries enjoy an excellent financial reputation, Al-Zadjali pointed out.
The national debt of Gulf countries remains at its lowest rate compared to other countries. They have the strength to pursue their financial goals, while keeping a clear record, he added.
The senior bank official said Gulf economies continue to draw foreign investment in Gulf bonds and property, particularly at low international interest rates.
Al-Zadjali highlighted that some international interest rates follow a negative interest rate policy which gives a notable advantage for Gulf bonds and investment opportunities.
Gulf countries have long been attracting foreign investment either through bonds or direct investments. Gulf countries tend to invest in economically beneficial projects.
Any common currency to be announced is expected to be pegged either to the dollar or a basket of currencies because the volume of trade of the Gulf states with the countries of the European Union is much larger than that of their commerce with the United States. Gulf exports of oil to the European Union are estimated to constitute about 70 percent of European imports .
Reuters also reported the comments of Hamood bin Sangour Al-Zadjali on the monetary union.
The creation of monetary union became a primary objective of the six GCC members in the early 1980s, Reuters added.
Four of them — Qatar, Saudi Arabia, Kuwait and Bahrain — formed a joint monetary council and a forerunner to a Gulf central bank in March 2010. But the euro crisis and a lack of political will have slowed the project. Oman withdrew from the plan in 2006 and the UAE pulled out in 2009.
According to Reuters, any bankers in the region say privately that introduction of a single currency remains unlikely for the foreseeable future, given technical difficulties and the fact that GCC states are struggling with low oil prices, which are having varying impacts on their economies.