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While the GCC states barring Oman assert they would put in place a currency union by 2010, they have conveniently skirted the key question - when would the countries have a common currency.
Analysts say even if a face-saving monetary agreement was adopted by 2010, the GCC countries would not be able to introduce a common currency until 2015. This would worsen the already high inflation in the countries and force some of them to revalue their dollar-pegged currencies.
At an extraordinary meeting, central bank governors from all Gulf states except Oman approved a draft of the monetary union deal and a set of rules governing a monetary council that will form the first leg of a common central bank.
But little progress has actually been achieved toward getting a Eurozone-type single currency into circulation in the world's biggest oil exporting region.
Even as experts have long dismissed the 2010 deadline as unreachable, Gulf states have agreed to keep their pegs intact until achieving the single currency. This has created many a problem to the Gulf countries as the dollar tumbled to record troughs against the euro and a basket of major currencies this year and last.
The pegs have forced booming Gulf states to slash interest rates in tandem with the US Federal Reserve and driven up their import costs, spurring inflation.
In these circumstances the currency project was scuttled twice after Oman decided in 2006 not to join and Kuwait broke ranks with its neighbours by dropping its dollar peg in May 2007 partly to fight imported inflation.
Expediting the single currency could prevent other Gulf states, namely Qatar and the UAE, from following Kuwait's lead as they contend with the region's fastest rates of inflation.
Deciding on exchange rates for the new currency when it is introduced could be a major sticking point if inflation in the region remains as high and erratic as it has been in recent months. Valuing a new currency against existing currencies is difficult if the relative values of the existing currencies are constantly in flux.
In addition, an agreement between the GCC nations on a unified currency hinges on five criteria for the establishment of a common currency, including one that determines that the inflation rate of each country must be within two per cent of the weighted average for the region.
A customs union achieved in 2003 was the first major step towards full economic integration. But delays in such regional economic unions are not unprecedented, and many observers do not expect a unified currency until 2015. The euro, Europe's single currency, had its launch delayed as the UK and Denmark negotiated withdrawals from the monetary union while remaining in the broader economic and political alliance of the European Union.
'It's difficult but achievable,' says Marios Maratheftis, the regional head of research at Standard Chartered in Dubai. 'Co-ordination is the biggest obstacle. We have to decide where the central bank is going to be based, and we need to make sure that the roles of these sorts of institutions are made clear. Once we have this in place it should not take long.'
Qatar's prime minister, saying he would not revalue the riyal or tinker with the dollar peg in the medium term, made a plea in February for Gulf states to expedite the single currency, and float it 'like the Japanese yen'.
A currency union includes agreeing on payment settlement systems, banking supervision regulations and exchange rate policy. All these would delay the currency's issuance to as far as 2015, experts say.
Gulf policymakers can in the meantime collaborate to avoiding a new spell of currency speculation.
UAE Central Bank governor Sultan Nasser Al Suweidi has been a vocal critic of the deadline - saying last October that he expected a single currency would take until 2015. He warned this week that skyrocketing prices threatened to delay the project.
In November, Gulf rulers will likely approve the formation of a monetary council and proclaim that 2010 is achievable.
But each Gulf state will have to ratify the council before it can even set a timetable for a monetary union.
Even if the council is formed before 2010, it would take at least another two years for it to be transformed into a central bank with power to decide on whether the single currency will remain pegged to the dollar, to a basket or freely floated, analysts say.
Gulf rulers could announce by the end of 2009 the name of the single currency, the conversion ratio and the timeline for rolling it out, according to the suggestions presented to central bankers.
