Friday, May 22, 2009

UAE pulls plug on common currency, Yemeni has Omani passport revolked.

In a dramatic move in response to the GCC monetary council deciding to base the planned Central Bank in Saudi, the UAE announced its withdrawal from the single currency scheme. Oman had pulled out a couple of years ago.

The UAE have said they will reconsider as long as that decision is reversed and the new bank is hosted in Abu Dhabi, according to reports today in the Gulf News.

UAE has most suitable financial infrastructure in region: Al Mansouri

By Himendra Mohan Kumar, Staff Reporter
Published: May 21, 2009, 23:15

Abu Dhabi: A rethink by the UAE on its decision to pull out of the Gulf Cooperation Council (GCC) monetary union plans is possible, provided Abu Dhabi is chosen over Riyadh as the location for the proposed GCC Central Bank, Minister of Economy Sultan Bin Saeed Al Mansouri said here on Thursday.

"The decision has to go back to the cabinet of the UAE. We have to feel comfortable with the decision ourselves," Al Mansouri told reporters.

Earlier this month, the GCC secretariat announced that the proposed GCC Central Bank would be located in Riyadh, a decision which disappointed the UAE and prompted its decision to formally pull out of the proposed Gulf monetary union on Wednesday.

The UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi said there will be no change in the UAE's monetary policy and that the dirham will remain pegged to the dollar.

The UAE move jeopardised the future of the region's single currency aspirations, which is aimed to encourage trade and financial integration.

"We are very practical and open. UAE has the most suitable financial infrastructure in the region and we were the first nation to apply to host the GCC Central Bank in Abu Dhabi," said Al Mansouri.

He said the UAE had supported bids of other countries for hosting different GCC bodies. "We do not have any of the GCC organisations on UAE soil," said Al Mansouri.

However, he added that the UAE would continue to support the GCC monetary union.

"We are still part of the GCC economic structure," said Mansouri.

A UAE Central Bank source told Gulf News previously the country had been told initially that it would host the GCC Central Bank.

"The work on the headquarters [in Abu Dhabi] was done and the place was ready to start operations," he said, adding that the UAE was "taken off guard" by the decision to base the bank in Saudi Arabia.

The GCC in 2001 agreed to form an EU-style monetary union. Oman pulled out in 2007. Saudi Arabia, the largest Arab economy, Kuwait, Qatar and Bahrain are still part of the project.

Its a nice tale of the tense nature of relationships in the GCC. Without the UAE, second biggest economy in the GCC, the single currency will be a damp squib.

Meanwhile, Yemen's recent request for Oman to stop protecting a former Yemeni politician was granted. See News Yemen .

Oman withdraws citizenship from Yemeni former vice president
MUSCAT, NewsYemen

The Sultanate of Oman announced on Thursday withdrawal of the Omani citizenship from Ali Salim Al-Beidh following his announcement to return to the political activity.

Official Saba quoted a statement attributed to the Oman News Agency (ONA) as saying that the Sultanate Police has confirmed "the Omani citizenship has been withdrawn from Ali Salim Al-Bidh immediately according to the Omani laws enforced".
"Al-Bidh has taken his decision without permission from the Sultanate to which he headed for in 1994," said the statement.

The source affirmed that "the Sultanate of Oman will ever continue to be the loyal neighbor for Yemen and wishes it every progress and welfare."

1 comment:

  1. I hope the recent UAE-Azerbaijan Joint Economic Committee meeting will help strengthen the social and economic welfare of the people in both the countries. UAE has invested millions of dollars in Azarbaijan and the trade turnover between both the countries has rose to a great extent during the past few months.


If you wish to post anonymously, please pick a nickname by selecting the Name/URL option, or at least sign off your comment with one! I will delete comments I find objectionable or needlessly inflammatory. Sorry for the word verification.... OMG the spam has gotten BAD these past 12 months... trying to avoid making one log in...