GCC Monetary Union delay likely
The Gulf central bank governors, who met in Saudi Arabia in early September, announced that the 2010 target is not realistic, but said that they would work towards an early deadline.It's both. Of course when you've pegged your currency to the dollar monetary policy is straightforward.
Suwaidi's statement is the first by a Gulf central bank governor that has admitted that the currency union project could be behind schedule by more than five years.
The UAE Central Bank governor said that the GCC states are behind in achieving common currency parameters such as free flow of capital and people across borders, compatible laws in land and property ownership and tax laws. "Allowing corporations to establish branches, expand their businesses, buy and hold property and flows of people, these are beyond the control of central banks," he said.
Meanwhile, the UAE Central Bank governor said monetary policy has very little to do with inflation control in the UAE. ...
"I think it is fiscal policy planning, expenditure by the government that has to be phased in a way that will have housing units before you have the influx of people who will do the developmental projects," he said.