* Gulf Arabs delay single currency deadline beyond 2010
* Gulf Arabs seek to coordinate policy in face of crisis
(Adds details, analyst, quotes)
By Daliah Merzaban
MANAMA, March 24 (Reuters) - The 2010 deadline for a Gulf Arab single currency will be extended and a new timetable set, senior Gulf officials said on Tuesday, in the first official recognition that monetary union plans would be delayed.
Five Gulf Arab states -- Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain and Qatar -- have been working towards launching a single currency in 2010, a deadline that analysts and even policymakers had long said was untenable.
"The 2010 date will be extended and the board of the monetary council will approve a new timetable for putting the currency into circulation," an official from the six-member Gulf Cooperation Council told reporters on condition of anonymity.
His comments were echoed by Naser al-Kaud, deputy assistant secretary-general of the GCC, who said a new timetable for the common currency would be set by the monetary council, which is envisaged as a precursor to a planned Gulf joint central bank, but has yet to be established.
The GCC has said the monetary council would be established by the end of this year.
"The monetary council will be established and one of its tasks will be to set the new timetable for the introduction of the physical currency," Kaud told reporters.
"By 2010, we will have set the accounting unit of the currency," he said, referring to the name and value of the common Gulf currency.
Oman dropped out of monetary union plans in 2006 and Kuwait dropped its dollar peg in 2007, throwing convergence efforts into disarray in an oil-exporting region where currencies have long been pegged to the greenback.
Analysts said it was now important for Gulf Arab states to set a new date for the common currency launch to avoid creating more uncertainty. The creation of the monetary council itself has been stuck over thorny political questions; where the joint body will be based and how much independence it will have.
"It's about time. Having said they are not going to meet the deadline they should also come out and say when they will meet it -- otherwise it will just create more uncertainty," said John Sfakianakis, chief economist at HSBC's Saudi affiliate SABB.
"It's more of a political than a technical decision at this stage. They could do it in two years. With the financial crisis they are seeing the importance of monetary union; now they see clearly that they are not isolated from what is happening."
FACING THE CRISIS
With a fully-fledged common currency off the agenda at least until next year, Gulf central banks are focused on helping their financial institutions weather the global crisis that ended a six-year boom fuelled by record crude oil prices.
Crude prices have collapsed from almost $150 a barrel in July to just over $53 a barrel on Tuesday.
"Central bank governors have been instructed to increase their consultations and take the necessary measures to bolster... the economies of the GCC against this crisis," Kaud said in a speech at a banking conference in Bahrain.
Gulf governments, which amassed surplus revenues from oil exports while prices were high, have pledged to keep public spending up even if it means posting budget deficits this year.
Gulf states have taken a slew of measures to defrost credit markets, cutting interest rates, guaranteeing bank deposits and offering extra liquidity to banks in an effort to keep economies moving as oil revenues fall and world trade flows decline.
"This conference is held at a time when the international crisis has impacted all countries of the world and has led to an unprecedented recession," Bahrain's central bank governor, Rasheed al-Maraj told the banking conference. "We have to recall the complications of the financial crisis... require continuous endeavours to protect the banking system... to deter any risks to the economic system."
(Writing by Lin Noueihed; editing by Stephen Nisbet)