GCC Monetary Council: Saudi Arabia Wants It All

April 5, 2010 by Sal

It seems that the UAE was right all the way when it pulled out of the new GCC Monetary Council after Saudi Arabia, home to the world’s largest proven reserves of crude oil, was selected to house the proposed central bank.

Last week, Saudi Arabian Monetary Agency (SAMA) governor Mohammed Al-Jasser was elected the first chairman of the GCC Monetary Council in Riyadh and Rasheed Al-Maraj, Bahrain Central Bank governor, was chosen as his deputy. Both will hold the positions for one year before the slots rotate to Kuwait and Qatar.

The Appointment of Mohammed Al-Jasser underscores Saudi Arabia’s dominance in the single currency project. Back in May 2009, the UAE withdrew from the GCC Monetary Council when Riyadh was chosen to host the Gulf Monetary Council. It feared that Saudi Arabia would have more control over the union since Riyadh was the headquarter of the GCC council. Well, today we can all agree that Saudi Arabia obviously wants it all! While at first it was only fair that Saudi Arabia would host the Council as it is the largest economy in the Gulf region.(47% of GCC GDP). Today, it’s nothing close to fair when compared to the European Central Bank, where the two largest economies share control of the ECB with Germany playing host and France appointing the head.

“From Saudi Arabia’s position, it shows a clear commitment to bring all the countries closer together and move toward the currency union,” said John Sfakianakis, chief economist at the Riyadh-based Banque Saudi Fransi-Credit Agricole Group.

Is Saudi Arabia really demonstrating a clear commitment to bring all the countries together and more towards the monetary union? Or is it simply enjoys control?

We have been covering the whole GCC Monetary Council debacle at Alpha Dinar as it evolved. Below is a list of previous articles in chronological order:


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12 Responses to “GCC Monetary Council: Saudi Arabia Wants It All”

  1. peteyb says:

    agreed. i think bahrain, as a more neutral territory with a strong banking tradition, should have hosted it. who knows: maybe this whole charade will fall apart before we have to replace our dinero


    Sal Reply:

    Bahrain is an excellent candidate. Seriously! Are they kidding? Accept whatever Saudi says.. What kind of commitment has Saudi shown except protectionism all along.


  2. Bo6air says:

    KSA always wanted it all…..from borders to policies…

    after the invasion Kuwait, like Bahrain, has become a little KSA .. with our streets named after their kings.

    hats off to the UAE… they should have had the central bank …….especially with someone like AlJasser at the head….he has proven his bias for KSA when the AlSane vs. Alqosaibi hit the public eyes with the outstanding loans…….when he insisted that they would pay the saudi banks before any other banks regardless of seniority!!

    I deeply hope this project fails….the saudis never played fair


    Sal Reply:

    True, they might as well call it a Ryal!


  3. Keynesian says:

    Saudi should host the GCC Monetary Union, but UAE should appoint the governor since it is the 2nd largest and most diversified economy in the GCC. A more neutral stance would have seen Bahrain act host or appoint the governor. Such a decision would’ve made sense since Bahrain is a major GCC financial hub.


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