Gulf Arabs say turmoil makes monetary union urgent

By Andrew Hammond and Souhail Karam

RIYADH (Reuters) - Gulf Arab oil producers said they had already taken adequate steps to deal with the impact of the global financial crisis but that turmoil on world markets had given new urgency to their plan for monetary union.

Finance ministers and central bank governors of the Gulf Cooperation Council (GCC) held an emergency meeting on Saturday to discuss coordination of their response to a global downturn that threatens to brake their region's six-year economic boom.

The states, preparing for a single currency by an unlikely 2010 deadline, emerged from the meeting with few public statements on how they would work together.

"The likely effects of the global crisis we can deal with through the measures we have already taken," Qatari Minister of Finance Youssef Kamal said after the meeting in Riyadh.

"The crisis proves how much we need a single currency and that a single central bank should be a supervisory body."

The agenda for the one-day meeting included discussion of new steps to shore up confidence in their banking sectors while reviewing regional investment plans.

Saudi Arabia, the United Arab Emirates and four other Gulf states have so far adopted separate policy responses to defrost interbank lending and boost confidence in their stock markets. The GCC also includes Qatar, Kuwait, Bahrain and Oman.

LITTLE COORDINATION