"The bank hopes to lower the dollar share of its foreign currency reserves to a range of between 50 per cent to 90 per cent," Al Suwaidi said. At present, he said 98 per cent of the bank's reserves holdings are in US dollars. The foreign currency reserves of the UAE currently stand at over $25 billion. The Central Bank is yet to convert 10 per cent of the total reserves into euros and gold, a decision it took earlier this year.

"It is our investment policy to diversify the reserves. There are  euro, yen and sterling... We are still waiting for the appropriate time and circumstances," Al Suweidi told reporters at a briefing after the conclusion of the two-day conference of GCC central bank governors and head of Monetary agencies in Abu Dhabi.

The GCC central bankers meeting discussed sovereignty matters relating to monetary union. It agreed that an explanatory note shall be forwarded, showing the sovereignty concessions GCC members states will make in case the monetary union is approved. This will include drawing up and implementation of monetary policy, issuance of the unified currency and determining exchange rate policy, approval of the legislation relating to the Union requiring amendments to the national banking, financial and monetary rules and regulations in line with the GCC framework.

The GCC Central Banks and Monetary Agencies at a meeting in Abu Dhabi yesterday also agreed on a six-point memorandum of recommendations on  GCC Monetary Union to be presented to Finance Ministers and Central Banks for developing a consensus. The outcome will be submitted to the heads of states at their meeting in Riyadh in December for a final adoption.

"We cannot disclose the recommendations we have agreed today, until they are presented to the meeting of GCC Finance Ministers and Central Banks Governors taking place in Jeddah on November 4-5," Al Suwaidi said.

On the subject of the currency-peg of the future GCC single currency, whose name has not yet been decided, he said that it would be pegged to US dollar, as per the recommendation of International Monetary Fund.

"The idea is, instead of pegging it with a basket of currencies, it should be pegged to single currency US dollar, as at the end it would have a tilt to a single currency," he explained.

Al Suwaidi was of the view that the ideal thing would be a free float of the GCC single currency. According to plan, the currency would free float after five years.

  In reply to a question regarding the headquarters of the GCC Central Bank in Abu Dhabi, the governor said that Qatar and Bahrain have also expressed their desire to host the offices of the supreme body.

"Though we were the first, in offering  to set-up the regulatory institution here...But we respect the desire expressed by two members of the GCC bloc," he added.

In answer to a question about the prospects of Abu Dhabi in the race for hosting the GCC Central Bank, he said:

"Anything is possible." Al Suwaidi said the name of GCC Central Bank has also not been yet decided. "It could be GCC Currency Board or GCC Central Bank."

 In reply to a question, he said that GulfStat is being established which would gather information on vital economic and financial statistics on GCC, on the pattern of European Union.