Bahrain green light for GCC currency
Manama, November 26, 2009
Bahrain has cleared the final hurdle towards joining a GCC common currency.
Members of the Shura Council approved the move, which has already won the backing of parliament and the government.
It means the path is clear for Bahrain to share a unified currency with Kuwait, Qatar and Saudi Arabia - with the UAE and Oman having already pulled out.
All that is left is for His Majesty King Hamad to ratify the legislation, which must be passed before the common currency can be adopted.
The King had ordered the Shura Council to fast track the bill so that Bahrain's official approval can be presented at the upcoming GCC Summit in Kuwait next month.
It had originally been hoped that a common GCC currency would be in place by next year, but delays mean it is not expected for at least another three years.
Shura Council member and chairman of its financial and economic affairs committee, Khalid Al Maskati, claimed once it is brought in, Bahrain would be part of one of the 10 strongest economies in the world.
'All GCC nationals are anticipating the unified currency and are hopeful that it will soon turn into reality, considering the benefits it brings for GCC economies,' he said.
'It is true that Bahrain has a limited economy, but its balanced fiscal approaches have ensured it stayed strong in the face of any financial threats.
'The moment we become part of the unified currency, the moment our limited economy will become unlimited and our strength will be further supported by others - similar to the EU.
'Every member of the currency has strengths and weaknesses, but together everyone will become stronger and weaknesses will be dealt with together.'
He described it as one of the best projects ever embarked upon by the GCC, but revealed a joint monetary council would have to be formed to establish bylaws for setting up a unified currency.
Central Bank of Bahrain (CBB) Governor Rasheed Al Maraj said this council would formulate monetary policy, but individual central banks would continue monitoring banks and other financial institutions.
'In the end, the unified currency will ensure stability and anything paid in that regard would be nothing compared to the benefits we would reap.'
Parliament financial and economic affairs committee chairman, MP Abduljalil Khalil, added that he expected a decision to be made at the GCC Summit on whether the UAE and Oman would join the common currency.-TradeArabia News Service