Given the troubles of Dubai and, seemingly, a third of the EU countries, a move on the part of gulf states to pursue a unified currency can only be interpreted as a major vote of no confidence on the dollar.
Several Gulf States are taking the steps necessary to create a pan-arab currency. The core group of countries consists of Saudi Arabia, Kuwait, Bahrain, and Qatar.
The Independent: The Gulf currency – dubbed “Gulfo” – is likely to track a global exchange basket and may ultimately float as a regional reserve currency in its own right. “The US dollar has failed. We need to delink,” said Nahed Taher, chief executive of Bahrain’s Gulf One Investment Bank.
This is not a new concept, back during the 70’s the Shah of Iran had tried to get the ball rolling on such a concept, arguing that the gulf countries should use their oil wealth as a basis to create their own central bank and currency. Iran recently also launched an oil bourse, with the intention of being able to price oil in an alternative currency, but so far it hasn’t had much of an impact.
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