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UAE seeking new terms for rejoining GCC union

Lithuania, May 23, 2009

The UAE would consider rejoining a Gulf monetary union if terms change and its neighbours agree to allow a joint central bank to be based in the country, its foreign minister has said.

Foreign Minister Shaikh Abdullah bin Zayed Al Nahyan left the door open for the UAE to rejoin the euro zone-style single currency, a day after pulling out, but did not elaborate on what conditions would have to be met.

'If the terms are different, we will look positively to that. At the moment the terms are unacceptable for the UAE, and that's why we decided not to join,' Shaikh Abdullah was quoted as saying in our sister publication, the Gulf Daily News.

The second-largest Arab economy broke ranks with Saudi Arabia and three other Gulf states this week by withdrawing from the long-troubled plan in protest of a May 5 decision to base the joint central bank in the Saudi capital, Riyadh.

Asked what terms would have to change, Shaikh Abdullah said that up until last year, only the UAE had been a contender to host the joint body that would be responsible for managing and issuing Gulf currency notes and coins.

In September 2006, the UAE central bank governor had said capital city Abu Dhabi was chosen by GCC states as the central bank headquarters, comments later retracted by GCC policymakers.

'When I say the terms, the UAE was the first country supposed to host the central bank, and we believe we had the right to do so. It did not happen,' Shaikh Abdullah said.

'All the other countries did not mention anything about hosting the central bank until last year.

'For the first four years it was only the UAE which was a candidate to host the bank. So this is where we are today.'

Shaikh Abdullah declined to comment when asked if Saudi Arabia had proposed the UAE take the presidency of the central bank as a concession for sticking with the project, as some Gulf officials have said had happened. – TradeArabia News Service




Tags: UAE | Central Bank | Euro zone | GCC Union | Lithuania |

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