UAE withdrawal from monetary union to have no rating impact

Standard & Poor's Ratings Services today said that news that the UAE has abandoned plans to join the planned Gulf Cooperation Council (GCC) monetary union raises significant doubts over the viability of the project going forward.

"Despite the UAE's decision, we believe that the economic benefits of monetary union in the GCC were likely to be minimal, given the existing customs union within the GCC and the uniform exchange rate regimes across all countries, with the exception of Kuwait," Standard & Poor's credit analyst Farouk Soussa said.

"As such, we consider that the decision per se has no bearing on the ratings on any sovereigns in the GCC region."