Economics GCCs Dollar Peg Essay Example | Topics and Well Written Essays - 500 words

Economics GCCs Dollar Peg - Essay ExampleThis trend is considered a major contributor to the rising levels of largeness in the gulf region. The current levels of inflation are stated to be the highest in the last 30 years (Seville, 2008). At the same time the gross domestic product growth started declining during the same period. Zawya (2008) wrote about some of the research studies carried out in 2008 which predicted that the gulf nations would be able to register a lower nominal gross domestic product rise of about 16.4 percent till 2010, provided the crude prices average around $120 per barrel in 2008, $131 in 2009 and $133 in 2010. But, with crude oil prices tumbling down to $50 per barrel in the international market, the situation is starkly different today. Such developments resulted into a serious debate on how the gulf nations should urinate appropriate measures to handle the situation.In the run up to the discussion towards taking mutually agreed steps for handling the mo netary crisis in the gulf region, the GCC started discussing measures like adopting a common currency within the region. 2010 was being talked about as the deadline for coming out for a currency union (Ghafour, 2005). But these plans received a jolt when Kuwait unilaterally decided that it needs to move away from dollar peg. This step was taken by Kuwait central bank in order to contain the rising inflation.