Pressure on UAE to rejoin monetary union project

Pressure on UAE to rejoin monetary union project

Abu Dhabi hosting GCC summit this year, others warn of weakened union.

July 18, 2010 3:14 by Samuel Potter

Pressure is expected to increase on the UAE to rejoin plans for a unified Gulf currency, reports the National.

The increase is expected ahead of the next annual GCC summit, which Abu Dhabi hosts later this year. Officials have given fresh warning that the UAE’s lack of involvement is likely to diminish the union’s strength, says the paper.

“The monetary union is not an impossible task without the UAE but I do believe the other members will continue to cajole the UAE to join,” said John Sfakianakis, the chief economist at Banque Saudi Fransi. “As progress is made on the ground the UAE will realize its interests will be better served by being part of the plans, where it can influence decision-making.”

The UAE has repeatedly ruled out rejoining the project in the near term, says the paper, after it withdrew in May last year. But apparently there are hopes it will rejoin the process if progress is made in establishing the foundations.

Sultan al Suwaidi, the Governor of the UAE Central Bank, said in March the country remained committed to the concept of a single currency in the region, but ensuring free trade was the priority.

Oman also left the project in 2007, says the report.