Gulf states will sign an agreement for monetary union on June 7 in Riyadh, Gulf Cooperation Council (GCC) Secretary-General Abdul Rahman Al-Attiyah said at a meeting of the GCC finance ministers in Muscat Saturday. Al-Attiyah said the GCC's Higher Council had authorized the Ministerial Council to sign the agreement. The GCC secretariat general is seeking through its communication with Saudi Arabia, Kuwait, Bahrain and Qatar to implement the Higher Council order to approve the agreement before next September in order for it to be effective by the beginning of 2010, prior to establishing the Monetary Council before the end of the current year. Al-Attiyah added that executive steps for the establishment of the Monetary Council were awaiting moves from legislative bodies in member countries to approve the Monetary Union Agreement which contains the union's legislative and institutional framework. The Monetary Council will be tasked with technical requirements, preparations for the Central Bank, and the single currency. Bahrain is the only country to have already approved the agreement. The Kuwaiti finance ministry has submitted the agreement to Kuwait's Council of Ministers for approval. Saudi Finance Minister Ibrahim Al-Assaf in an interview to a news agency said the Kingdom and three other Gulf states will proceed with their monetary union plan and the location of a Gulf central bank would not be open for renegotiation. “It is not derailed, it will continue. The monetary union will proceed as planned,” he said. “As long as we are moving in the right direction, this is the most important.” The UAE dropped out of the single currency plan. Asked if the location of the central bank was open for renegotiation, Al-Assaf said: “No. There is a decision that has been taken by our leaders.” Al-Assaf said one of the key benefits of the single currency would be to reduce transaction costs between the member countries in areas such as trade and tourism. “Having a single currency will eliminate the risk and that tremendously influences decisions to invest, to deposit funds, to do any type of trade.” The single currency would also enable the region to have a “major currency bloc,” he said. In 2001, the six members of the GCC - a loose political and economic alliance - agreed to set up a monetary union like that of the European Union. Oman dropped out of the plan in 2006. __
