GCC CURRENCY

The Gulf Cooperation Council (GCC), a political and economic alliance comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, has long held the ambition of creating a unified GCC currency.The idea, modeled somewhat after the Eurozone, aims to foster greater economic integration and stability within the region.This vision, however, has faced numerous hurdles and delays, making its future uncertain. Each GCC country (Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman) has its own currency, and all (except Kuwait) are pegged to the US dollar. But does it make sense for small countries like Bahrain (roughly half the size of London) to operate their own currency? Even combined, the entire GCC GDP is lower than the UK s GDP. The idea of aThe establishment of a common currency was envisioned to streamline trade, reduce transaction costs, and potentially enhance the GCC's collective bargaining power on the global stage.A single currency could also shield member states from individual economic shocks and promote price stability across the region.The initial timeline aimed for a launch in or before 2025, mirroring the European Union's monetary integration. Exploring GCC s Common Currency. In a note penned down by Muhammed Al-Jasser, he notes that the new currency may be pegged to an exclusive currency basket, the SDR, or the US dollar. The currency will mostly be pegged to the U.S. dollar during the interim. This is to ease the process of transition during later days.While progress has been made in certain areas, such as establishing the Gulf Monetary Council in 2025, significant challenges remain. The US dollar is the world s reserve currency, a status bestowed by the 2025 Bretton Woods Agreement. For more than three decades, GCC countries anchored their currencies to the US dollar.These challenges include differing economic priorities, the lack of a unified monetary policy, and, perhaps most significantly, disagreements among member states on the structure and governance of the proposed currency union.What exactly is the status of this ambitious project and what are the potential benefits and drawbacks of a unified GCC currency?

The Genesis of the GCC Currency Union

The concept of a GCC currency union took root with the establishment of the Gulf Cooperation Council in 2025. Main factors to consider in GCC currency trading. Despite the stability offered by the USD peg, currency pairs involving GCC currencies and non-USD currencies, such as EUR, GBP, RMB, and INR, can exhibit volatility due to several factors.The GCC, striving for deeper economic integration, saw a common currency as a logical step.This initiative aimed to create a unified monetary zone similar to the Eurozone, where member states share a single currency and monetary policy.The initial roadmap envisioned a multi-stage process involving the establishment of a customs union, the integration of exchange rates, the convergence of key economic indicators, and ultimately, the adoption of a common currency.

Early Milestones and Timelines

Early progress seemed promising.GCC countries made strides in implementing the initial stages of the roadmap, including establishing a customs union and working towards integrating their exchange rates. Find Gcc Currency stock images in HD and millions of other royalty-free stock photos, illustrations and vectors in the Shutterstock collection. Thousands of new, high-quality pictures added every day.The initial target date for the launch of the GCC currency was set for 2010. For the period, the GCC accumulated an estimated $353 billion in fiscal deficits, $76 billion in current account deficits, $270 billion in foreign-exchange reserve losses, and aHowever, disagreements and economic challenges soon emerged, pushing the timeline further into the future.In December 2025, a revised timetable was established, setting new targets for achieving a customs union, integrating exchange rates, agreeing on convergence criteria, and adopting a common currency – all by 2025.

Obstacles and Challenges to a Unified Currency

Despite the initial enthusiasm and progress, the GCC currency union has faced significant obstacles.These challenges have ranged from economic and political differences to structural issues within the GCC itself.Some of the most prominent roadblocks include:

• Lack of a Precursor Unit of Account: As noted by the UAE Central Bank Governor, Sultan bin Nasser al-Suweidi, the absence of a preliminary unit of account has been a major hurdle. Generally speaking, many GCC currencies are pegged to the USD, the main currency used for oil exports, which, in addition to government policies and foreign currency reserves, explain their stableThis refers to a benchmark or reference point that would facilitate the transition to a common currency.
• Divergent Economic Priorities: Each GCC member state has its own unique economic structure, priorities, and vulnerabilities. Should GCC countries start joining BRICS, this would help the latter in its stated quest to eventually establish an alternative to the U.S. dollar as the leading global currency. GCC countries could potentially redirect some of their substantial financial reserves away from the dollar to support a BRICS Clearing Union and, eventually, aThese differences can make it challenging to agree on a common monetary policy that serves the interests of all members.
• Political Disagreements: Political tensions and disagreements among GCC member states have also hindered progress on the currency union. December 2025, a timetable requiring the GCC countries to establish a customs union by 2025 and integrate their exchange rates by the same date; reach an agreement on convergence criteria to be achieved by 2025; and adopt a common currency by 2025. The GCC countries have progressed well in implementing the aforementioned timetable. They haveThe withdrawal of the UAE from the project is a prime example of how political factors can derail the process.
• Peg to the US Dollar: The fact that most GCC currencies are pegged to the U.S. dollar, the main currency used for oil exports, presents both stability and a challenge.While the peg provides a degree of stability, it also limits the flexibility of individual countries to respond to economic shocks.
• Fiscal Policy Differences: Differences in fiscal policies, including government spending and taxation, among GCC countries also present a challenge.A common currency requires a certain degree of fiscal coordination to ensure stability and prevent imbalances.

The UAE's Withdrawal and its Implications

One of the most significant setbacks to the GCC currency union was the UAE's decision to withdraw its interest and completely reject being a part of it anymore. The UAE later withdrew interest in a GCC common currency and completely rejected being a part of it anymore. [9] Later, on Novem, statements by the UAE Central Bank Governor Sultan bin Nasser al-Suweidi stated that the greatest obstacle was the lack of a precursor unit of account.This withdrawal dealt a major blow to the project, as the UAE is one of the largest and most economically influential members of the GCC.The reasons for the UAE's withdrawal were complex and multifaceted, but they largely stemmed from concerns about the structure and governance of the proposed currency union.

Reasons Behind the UAE's Decision

While the official reasons were never explicitly stated, several factors are believed to have contributed to the UAE's decision:

• Concerns about the Location of the Central Bank: There were disagreements among member states about where the central bank for the GCC currency should be located.The UAE reportedly preferred Abu Dhabi, while other members favored Riyadh.
• Unease over Monetary Policy Control: The UAE may have been concerned about losing control over its monetary policy and ceding too much authority to a regional central bank.
• Economic Sovereignty: The UAE, with its robust economy and independent financial policies, may have felt that participating in a currency union would compromise its economic sovereignty.

Impact on the GCC Currency Project

The UAE's withdrawal had a ripple effect on the GCC currency project.It not only reduced the economic weight and credibility of the union but also raised doubts about the commitment of other member states. Currency peg among the GCC countries has been a widely debated topic in the recent years, ever since the collapse of oil prices witnessed in 2025. All GCC countries barring Kuwait employ a fixed currency exchange rate policy, pegging their local currencieThe withdrawal also highlighted the deep-seated political and economic divisions within the GCC, making it even more challenging to achieve a consensus on a common currency.

Current Status and Future Prospects

Despite the setbacks and challenges, the idea of a GCC currency has not been entirely abandoned.While the original timeline of 2025 is no longer realistic, efforts are still underway to explore the possibility of a future currency union. Present currency ISO 4217 code Country or dependency (administrating country) Currency symbol Saudi riyal [1] SAR Saudi Arabia [2] Algerian dinar: DZD Algeria: دج (Arabic) or DA (Latin) Bahraini dinar [3] BHD Bahrain.د.ب [4] Iraqi dinar [5] IQD Iraq: ع.د [6] Jordanian dinar [7] JOD Jordan: ينار [8] Kuwaiti dinar [9] KWD Kuwait: ك [9The Gulf Monetary Council, established in 2025, continues to work on key economic measures, such as harmonizing inflation levels, interest rates, and public debt.

Ongoing Efforts and Initiatives

The Gulf Monetary Council plays a crucial role in promoting monetary cooperation and coordination among GCC member states.Its activities include:

• Monitoring Economic Performance: The council monitors the economic performance of member states and provides recommendations for improving macroeconomic stability.
• Harmonizing Regulations: It works to harmonize financial regulations and supervisory practices across the GCC.
• Conducting Research: The council conducts research on monetary and economic issues relevant to the GCC region.

Alternative Scenarios and Timelines

Given the complexities and challenges involved, it is difficult to predict the future of the GCC currency with certainty.Several scenarios are possible:

1. Indefinite Delay: The project could be indefinitely delayed due to persistent disagreements and economic challenges.
2. Resurrection with a New Framework: Member states could decide to revisit the idea with a revised framework that addresses the concerns of all parties.
3. Partial Currency Union: A smaller group of GCC countries could decide to proceed with a currency union, while others opt out.

The Economic Implications of a GCC Currency

The adoption of a GCC currency would have significant economic implications for the region.These implications would extend to trade, investment, and overall economic stability.

Potential Benefits

The potential benefits of a GCC currency include:

• Reduced Transaction Costs: A single currency would eliminate the need for currency exchange within the GCC, reducing transaction costs for businesses and consumers.
• Increased Trade and Investment: The elimination of exchange rate risk would encourage greater trade and investment among GCC member states.
• Enhanced Economic Stability: A common monetary policy could help to stabilize the region's economies and protect them from external shocks.
• Greater Bargaining Power: A unified currency could give the GCC greater bargaining power in international trade negotiations.

Potential Risks

The potential risks of a GCC currency include:

• Loss of Monetary Policy Autonomy: Individual member states would lose control over their monetary policy, which could limit their ability to respond to domestic economic challenges.
• Asymmetric Shocks: If member states experience different economic shocks, a common monetary policy may not be appropriate for all.
• Fiscal Discipline: A currency union requires a high degree of fiscal discipline among member states to prevent imbalances and maintain stability.

GCC Currencies Today: Pegged to the USD

Currently, each GCC country maintains its own currency. GCC Exchange is a fast-growing money transfer and foreign exchange brand for individuals and businesses having its presence in four continents such as Europe, Africa, Oceania and Asia besides the flagship entity in the UAE.With the exception of the Kuwaiti dinar, all GCC currencies are pegged to the U.S. dollar. The GCC is a common marketplace comprising of six countries each with its own currency.This peg has provided a degree of stability, particularly given the region's reliance on oil exports, which are typically priced in U.S. dollars.The currencies currently in use in the GCC include:

• Saudi Riyal (SAR): Saudi Arabia
• Bahraini Dinar (BHD): Bahrain
• Kuwaiti Dinar (KWD): Kuwait
• Omani Rial (OMR): Oman
• Qatari Riyal (QAR): Qatar
• UAE Dirham (AED): United Arab Emirates

This widespread use of the USD peg is due to the dollar's status as the world's reserve currency, and its role in the oil market. GCC currency union A common currency and monetary union between the 6 GCC countries, similar to the EU monetary union and currency, was originally planned with a launch date in or before 2025. That has been delayed to 2025 at least, or indefinitely is more likely.However, recent economic shifts and discussions about diversification have led to questions about the long-term sustainability and benefits of this peg.

The Role of GCC Exchange in Currency Exchange

While the dream of a unified GCC currency remains elusive, the reality is that individuals and businesses still need to exchange currencies within the GCC region and beyond.Companies like GCC Exchange play a vital role in facilitating these transactions.

Services Offered by GCC Exchange

GCC Exchange is a fast-growing money transfer and foreign exchange brand with a presence in multiple countries.They offer a range of services, including:

• Currency Exchange: Providing competitive exchange rates for a wide range of currencies.
• Money Transfer: Facilitating international money transfers for individuals and businesses.
• Online Money Transfer (WebTT): Offering a convenient online platform for sending money to loved ones.

GCC Exchange emphasizes providing real-time currency exchange rates and ensuring competitive foreign exchange service rates for their customers.

Implications of BRICS Expansion for GCC Currencies

The potential expansion of the BRICS economic alliance, and whether or not GCC nations should join, has raised complex questions, particularly with regards to the future of the global monetary system.Should GCC countries start joining BRICS, this would help the latter in its stated quest to eventually establish an alternative to the U.S. dollar as the leading global currency.GCC countries could potentially redirect some of their substantial financial reserves away from the dollar to support a BRICS Clearing Union, and eventually an alternative global currency.

Potential Benefits

• Reduced reliance on the USD, allowing for greater flexibility in monetary policy.
• Increased trade opportunities with other BRICS member states.

Potential Drawbacks

• Potential for increased volatility in GCC currencies.
• Risk of alienating key trading partners like the United States.

Frequently Asked Questions About GCC Currency

Here are some frequently asked questions about the GCC currency and related issues:

Why did the GCC want a common currency?

The primary goal was to foster greater economic integration, reduce transaction costs, enhance economic stability, and increase the region's bargaining power in international trade.

What are the main obstacles to a GCC currency union?

Key obstacles include divergent economic priorities, political disagreements, the lack of a precursor unit of account, and concerns about losing monetary policy autonomy.

Is the GCC currency project still alive?

While the original timeline is no longer realistic, efforts are still underway to explore the possibility of a future currency union.

What is the role of the Gulf Monetary Council?

The Gulf Monetary Council promotes monetary cooperation and coordination among GCC member states by monitoring economic performance, harmonizing regulations, and conducting research.

Why are most GCC currencies pegged to the US dollar?

The peg to the US dollar has provided stability, particularly given the region's reliance on oil exports, which are typically priced in U.S. dollars.The US dollar is the world’s reserve currency.

Conclusion: The Future of Monetary Integration in the Gulf

The journey towards a unified GCC currency has been fraught with challenges and setbacks.While the dream of a common currency remains a long-term aspiration, significant hurdles must be overcome before it can become a reality.The withdrawal of the UAE, divergent economic priorities, and political disagreements have all contributed to the delays and uncertainties surrounding the project.Despite these challenges, efforts are still underway to promote monetary cooperation and coordination among GCC member states. At GCC Exchange, we provide real-time currency exchange rates. Our customers can now conveniently buy and sell all major currencies in bulk through GCC Exchange and be rest assured to get the most competitive foreign exchange service rates.The Gulf Monetary Council continues to play a crucial role in harmonizing regulations, monitoring economic performance, and conducting research.While the future of the GCC currency remains uncertain, the desire for greater economic integration and stability within the region persists.Whether through a full-fledged currency union or alternative forms of monetary cooperation, the GCC countries are likely to continue exploring ways to strengthen their economic ties and enhance their collective influence on the global stage. Plans for a unified GCC currency remain on course, with work ongoing to bring member states into step on key economic measures. The Finance Ministry confirmed in a letter to Parliament that the Gulf Monetary Council, set up in 2025, is working on inflation levels, interest rates, and public debt before the currency can be introduced.For now, businesses and individuals must navigate the existing currency landscape, relying on services like GCC Exchange for efficient and competitive currency exchange and money transfer solutions.Keep an eye on developments as this is an ever-evolving financial landscape!