Gulf Cooperation Council will link a single currency to a basket of currencies

Kuwait: Gulf Cooperation Council will link a single currency to a basket of currencies

An official at the Kuwaiti government said on Tuesday that Gulf Arab states will consider the option proposed single currency peg to a basket of currencies instead of U.S. dollar.

Officials expect the GCC peg to the dollar standard, although the Qatar questioned the feasibility of linking its currency (Rial) the dollar in recent months as the U.S. currency fell to its lowest level in 15 months against major currencies.

Informed the Kuwaiti Foreign Minister Sheikh Mohammad Al-Salem Al-Sabah, National Assembly (parliament) that it is not necessary to link the currency of the Gulf Cooperation Council in a particular currency. He said that the linkage may be a single currency or basket of currencies and the Gulf states will discuss this matter.

With the exception of Kuwait, which in fact the dollar peg in favor of a basket of currencies in 2007 linking the three countries that joined the monetary union, namely, Saudi Arabia, Qatar and Bahrain peg their currencies to the dollar.

The Council postponed the nation on Tuesday to vote on monetary union to the eighth of December, as members of the Council needs more time to assess the economic consequences of the project.

Saudi Arabia is the only one that have ratified the monetary union so far, raising questions about the viability of the project for implementation.

The Minister of Finance Mustafa Al-Shamali Kuwaiti National Assembly session that the single currency will not apply in the near future and added that the issue needed enough time.

Last month, finance ministers and central bankers from the largest oil producing region in the world, Kuwait, Qatar and Bahrain to ratify the project by the end of the year.

Involved four of the six members of the Gulf Cooperation Council monetary union project after the withdrawal of the United Arab Emirates in May in a blow to the project after three years of the withdrawal of the Sultanate of Oman.

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