The United Arab Emirates has pulled out of a proposed monetary union deal being negotiated by the six-nation Gulf Cooperation Council (GCC), a foreign ministry official said on Wednesday.

"The UAE has decided not to be party to the accord on Gulf monetary union," the spokesman said, as quoted by the official WAM news agency.

"The general secretariat of the GCC was officially informed today," added the official, who was not named by the news agency.

The energy-rich GCC groups the UAE and Oman with Bahrain, Kuwait, Qatar and Saudi Arabia.

Wednesday's announcement comes in the wake of reservations expressed by the UAE after an informal GCC meeting in Saudi Arabia on May 5 decided that Riyadh would host the region's future banking authority.

GCC Secretary General Abdurrahman al-Attiyah told a news conference after the Riyadh meeting that the first step towards creating a Gulf central bank would be the establishment of a Riyadh-based monetary council, which would exist during a "transitional phase" in the move towards monetary union.

However, Attiyah said after the day-long summit that the group has pulled back from the target of creating a common currency by 2010.