Currency Union and Exchange Rate Issues: Lessons for the Gulf States (New Horizons in Money and Finance)

This book - written by leading academics and practitioners in the field - brings together cutting edge research on exchange rate regime and monetary union issues. There is a particular focus on the implications for member states of the Gulf Cooperation Council (GCC) which is itself working towards forming a monetary union for the Gulf States. The relatively dramatic movements in the US dollar in the recent past, and also in the early 1990s, have called the practice of pegging to the US dollar into question for a group of countries that predominantly rely on hydrocarbons as their primary export. The book considers the key issues which must be addressed by the GCC in trying to form a monetary union for the Gulf countries and also the rigid pegging of member states' currencies to the US dollar. The proposed monetary union raises clear issues in terms of the appropriateness of such a regime for these countries and whether, for example, the necessary institutional mechanisms are in place ahead of the proposed union. Currency Union and Exchange Rate Issues brings together the perspectives of a group of experts who focus on these important issues, and provide analysis of the policy options. Academics, policymakers and postgraduates in international finance will find much to consider and learn from in this informative book. In preparation for monetary union most of the Gulf Cooperation Council (GCC) countries have pegged their currencies rigidly to the US dollar. However, the relatively dramatic movements in the US dollar in the recent past, and also in the early 1990s, have called this practice into question for a group of countries that predominantly rely on hydrocarbons as their primary export. The proposed monetary union raises clear issues in terms of the appropriateness of such a regime for these countries and whether, for example, the necessary institutional mechanisms are in place ahead of the proposed union. This book brings together the perspectives of a group of experts who focus on these important issues, and explores the appropriateness of pegging to the dollar for both individual countries prior to monetary union and for the subsequent union itself Copyright......Page 5 Contents......Page 6 Contributors......Page 7 1. Introduction......Page 8 2. Currency union in the GCC countries: history, prerequisites and implications......Page 14 3. Economic, political and institutional prerequisites for monetary union among the members of the Gulf Cooperation Council......Page 36 4. The euro experience and lessons for the GCC currency union......Page 77 5. The GCC monetary union: choice of exchange rate regime......Page 90 6. International experiences in operating exchange rate regimes: drawing lessons from the United Arab Emirates......Page 105 7. Operational implications of changing to alternative exchange rate regimes......Page 127 8. The United Arab Emirates: exchange rate regime options......Page 161 Index......Page 198