New GCC monetary union to allow 3% inflation
The proposed monetary union of the GCC, expected to be established in 2010 as a six-member entity, will allow a maximum of three percent inflation, according to Sultan Bin Nasser Al Suwaidi, the UAE Central Bank Governor.
Suwaidi made the statements at a MEED seminar this week, saying that a three percent interest rate differential between the six countries would be allowed.
"The inflation band is not exceeding three percent," the governor said, "but in our case where we have oil and we have fluctuations there is also an additional element which takes into consideration the fluctuation in oil prices," reported Gulf News.
Suwaidi also added that most of the technical details such as economic conversion criteria and supervision agreements were already in place for the union, and what was left to be dealt with were "political" aspects of the deal.