Prospects for a GCC common currency / Implications of GCC currency union - Dissertation Example

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Prospects for a GCC common currency / Implications of GCC currency union

A new date has not been set, speculations setting it anywhere from two to ten years hence, which provides sufficient time and opportunity to assess the merits and the wisdom of the implementation of this course of action. One important consideration is the unit of value against which the new GCC currency will be pegged. Some speculate that the new currency will be backed by gold, consistent with the teachings in the Quran against riba (interest). It was not discounted, however, that the peg may be against the US dollar, at least initially (Daily Star, 15 Feb 2010). A proposal to use the International Monetary Fund (IMF) Special Drawing Rights (SDR), a theoretical currency used by the IMF for member states transacting with it, has been rejected. If the currency becomes a reality, four states – Saudi Arabia, Kuwait, Bahrain, and Qatar – have committed to adopting it as sole legal tender. Two other states – the UAE and Oman – have signified that they shall not join the currency union, although it may be conjectured that there is always a possibility that this may happen at a later date, when it shall be advantageous for them to do so. Host for the GCC central bank for the common currency is agreed to be situated in Riyadh, Saudi Arabia. ...
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Prospects for a GCC common currency: Implications of GCC currency union Background of the research problem In 2002, the euro was adopted as the first single currency of any unified monetary region worldwide. The euro was established by provision of the Maastricht Treaty in 1992…
Author : noehahn
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