Four central banks to halt lending next week

[Moses1234]

Four central banks to halt lending next week

The Qatar Central Bank. The monetary union of Saudi Arabia, Kuwait, Qatar and Bahrain will be commissioned early next year. (AFP)

By Staff Writer on Sunday, December 27, 2009

Central banks of four Gulf countries will halt their lending operations next week in line with their landmark agreement to launch the world's second major monetary union, a Saudi newspaper reported yesterday.

Saudi Arabia, Kuwait, Qatar and Bahrain, members of the six-nation Gulf Co-operation Council (GCC), will ask their central bank to completely stop lending from the beginning of 2010, when their monetary union is commissioned, Aleqtisadiah, an Arabic language newspaper said.

The move is in line with an agreement by the heads of state of the four signatories at the GCC summit in Kuwait in mid-December.

"The four members will begin at the start of 2010 implementing their summit decision, which bans their central bank from lending," the paper said.

"The agreement also stipulates liquidation of all debt owed to those central banks before the issuance of the single Gulf currency. It also bans those central banks from directly buying securities and other debt instruments issued in the region but they are allowed to buy such instruments from the secondary market."

The UAE and Oman, also GCC members, have pulled out of the monetary union, which those signatories decided to launch gradually in 2010. But officials have said the issuance of a joint currency could take nearly five years. Aleqtisadiah said the four members would focus in 2010 on completing the alignment of their fiscal and monetary policies ahead of the creation of the planned Gulf Central Bank, which will be based in Riyadh.

"These measures also include a mechanism to ensure the full implementation of the ban on lending by their central banks."

http://www.business24-7.ae/Articles/2009/12/Pages/26122009/12272009_1cb3df2c0efa4c60afd623eb25e8d69b.aspx

[jennaj]

Not to point out the obvious but what would this mean for our investing in the IQD

[danahatch]

It might be obvious to you but I need help. I read and read and sometimes I just need it be be explained.

[Torey0112]

I think this is good news.. IMO .. I think Iraq will be part of this eventually. It just makes good sense. But hey.. It's just my opinion

[sterns5048]

This may be a dumb question, and feel free to knock me out, but wouldnt it then be a good idea to buy the saudia arabia riyals now then, since they have the cheapest currency of the four major groups, because if they all go to a single currency then they over a few years time after cashing in the currencys go to a single new "paper currency", so wouldnt this make the riyals rise in value a lot?? just wondering, and again, feel free to call names or whatever makes you happy. Just lookin for an answer thanks

[Kimwil2]

This may be a dumb question, and feel free to knock me out, but wouldnt it then be a good idea to buy the saudia arabia riyals now then, since they have the cheapest currency of the four major groups, because if they all go to a single currency then they over a few years time after cashing in the currencys go to a single new "paper currency", so wouldnt this make the riyals rise in value a lot?? just wondering, and again, feel free to call names or whatever makes you happy. Just lookin for an answer thanks

It would be a good investment only if you think it will be valued more in the future.....

1.00 SAR = 0.266595 USD

Saudi Arabia Riyals United States Dollars

1 SAR = 0.266595 USD 1 USD = 3.75101 SAR

[whisky runner]

i am sure this new GCC money will not hold a value as oil is getting harder to get out of the ground and there running low on oil after 60 years of pumping oil ....

about the bank all it is is a central bank set up so these country can and must go thur this central bank to do business outside of there country … each country will have there own currency … like the euro … the banker are trying to set up banks for world business … if they get there way there will be 6 of these banks … china, japan and S. Korea world bank … the GCC … the euro, the amero … Indonesia, Singapore, and around that part of the world bank then a central Africa bank …. Six banks to do the world trading instead of many banks and nations …. The shut down is so the banks can find a rate to the new currency … and so the trading can go thur this new world bank and not the small nations … the usa is setting up these banks and starting them with 120 billions dollars each … nice job giving usa dollars away …

[SBX]

i am sure this new GCC money will not hold a value as oil is getting harder to get out of the ground and there running low on oil after 60 years of pumping oil ....

Ahhhh...not so fast....theres some articles that say the US alone has enough oil to support us for over 2000 years....22 times the amount Iraq has.

[whisky runner]

i was talking about middle east countries that are in the GCC and they running out of oil ... usa oil is hard oil and will take dollars to get out of the ground ... but there are many billions of barrels here in usa yes

[Watif]

Ahhhh...not so fast....theres some articles that say the US alone has enough oil to support us for over 2000 years....22 times the amount Iraq has.

I am not certain about this, but I think that much of the oil in North America is in shale. It is not cost effective to extract the oil in these cases. So regardless of how much oil there is, it would be too expensive to process for commercial sale, at least while the price per barrel is not much higher than it is now.

I'm not too up on the whole shale issue, or amounts. This is just a rough idea for those who may never heard of it.

http://en.wikipedia.org/wiki/Oil_shale

[Watif]

This may be a dumb question, and feel free to knock me out, but wouldnt it then be a good idea to buy the saudia arabia riyals now then, since they have the cheapest currency of the four major groups, because if they all go to a single currency then they over a few years time after cashing in the currencys go to a single new "paper currency", so wouldnt this make the riyals rise in value a lot?? just wondering, and again, feel free to call names or whatever makes you happy. Just lookin for an answer thanks

You are right. That has got to be the most stupidest question I have ever read here. I can't believe you would even have the nerve to ask that. What the he!! is wrong with you. You are such a .....

OK, that really wasn't directed at you, but I've been rather reserved here, and I needed to let out some steam. Thanks for letting me do that! I feel much better. Love ya, bro.

Actually, I'm glad you asked. God knows how many other people are thinking the same but afraid to ask. So keep 'em coming.

If I understand your question, you are asking if the lowest valued currency (in the GCC) would increase automatically (in comparison to the other participating nations) simply because those countries will use the same currency, and the new single currency will have a higher value.

I don't think so. The currency will only have a value based on the nation it is exchanged for, like in Europe with the Euro. It's a 'universal' currency, but not a 'universal' rate.

Using the Euro to clarify this, if you own one Euro and bring it to America you might get 1.5 US Dollars. for it. If you take that same one Euro to England, you might get less than one British Pound. When you convert this back into Euros, you will get the same one Euro, roughly. The Euro has the same value as whatever it exchanges for in that particular country.

Further clarification: If you take a ton of Euros and exchange then in another country at the highest rate you can find, when you bring that currency to the US, you will get the same amount you would have gotten had you brought the Euro to the US in the first place.

(Any corrections welcome)

Play with the exchange rate at this site

http://www.oanda.com/currency/converter/

History of the Euro

http://en.wikipedia.org/wiki/Euro

[teeitup72]

Ahhhh...not so fast....theres some articles that say the US alone has enough oil to support us for over 2000 years....22 times the amount Iraq has.

SBX we have the oil but it is the case of being able to get it and or use it. With the people we have in office right now we will never get to drill for it.

Just my opinion.

[SBX]

SBX we have the oil but it is the case of being able to get it and or use it. With the people we have in office right now we will never get to drill for it.

Just my opinion.

Well spoken......