Khaleeji (currency)

The Khaleeji (Arabic: خليجي‎‎ ) was a proposed name for the common currency of the member states of the Gulf Cooperation Council for the Arab States (GCC).

The term 'Khaleeji' is Arabic for "of the Gulf", and is traditionally associated with Eastern Arabia's Gulf states. The proposed name was turned down in late 2009, and no official name was later agreed prior to the withdrawal of an agreement for a GCC common currency. Although the name "Dinar" (Arabic: دينار‎‎, from Latin, dinarius) has been suggested since it is already used in the Arab world and is mentioned in the Quran due to a dinar being used during the time of the life of Mohammed.

Since Islamic economic jurisprudence prohibits interest, or 'riba,' there was speculation that the future GCC currency would be backed by gold.

However, senior figures in the GCC administration have stated that the currency may be linked to the US Dollar or would tie-up with a basket of currencies in which the US Dollar would have a lion's share.

The currencies of Saudi Arabia, the UAE, Qatar, Oman, and Bahrain are pegged to the US Dollar. Kuwait's Dinar is pegged to a basket of currencies including the US Dollar and the Euro. Saudi Arabia rejected calls for the International Monetary Fund SDR to be used as a reserve currency.

It was provisionally agreed on May 5, 2009, at the GCC consultative summit held at the Daraeya Palace in Riyadh, that Riyadh, Saudi Arabia, will host the Gulf Central Bank for this common currency. The UAE did not agree with this decision and criticized the fact that the large majority of GCC institutions were headquartered in Saudi Arabia. The UAE later withdrew interest in a GCC common currency and completely rejected being a part of it anymore. Later, on November 23, 2009, 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.

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