UAE pulls out of Gulf union plan

The United Arab Emirates is withdrawing from plans for Gulf monetary union, dealing a blow to further economic integration in the oil-rich region.

The state said it would be keeping its own currency, the dirham, which would remain pegged to the dollar.

No explanation was given, but the UAE has expressed reservations about the choice of the Saudi capital, Riyadh, as home for the union's central bank.

The state is the second of six Gulf states to pull out of the union plan.

Oman had already said it would not be taking part.

The other four states - Saudi Arabia, Kuwait, Qatar and Bahrain - are committed to the plan, said Mustapha al-Shamali, Kuwait's finance minister.