The UAE's central bank governor said a decision to base a joint Gulf central bank in Saudi Arabia was politically motivated and it ignored his country's financial advantages, state news agency WAM reported.

Meanwhile a Saudi-owned newspaper said high-level efforts were under way to convince the UAE, the second-largest Arab economy after Saudi Arabia, to reverse its withdrawal this week from the long-troubled monetary union plan in protest at a May 5 decision to base the joint central bank in Riyadh.

'The decision ignored the competitive advantages enjoyed by the UAE and its banking sector, including the largest number of banks, largest assets and largest deposits in the region,' said central bank governor Sultan Al-Suweidi, quoted by WAM late on Friday.

'The UAE also has 50 per cent of the Gulf Cooperation Council's international money transfers,' Suwaidi said.

The daily Asharq al-Awsat quoted an unnamed Gulf source as saying the diplomatic efforts to resolve the dispute were motivated by a 'fear that it would reflect on the performance of the Gulf Cooperation Council'.

UAE's foreign minister Sheikh Abdullah bin Zayed al-Nahayan told Reuters on Friday the Gulf state would consider rejoining the Gulf monetary union if terms change and its neighbours agree to allow the joint central bank to be based in the country.

Sheikh Abdullah had left the door open on Thursday for the UAE to rejoin the euro zone-style single currency, a day after breaking ranks with Saudi Arabia and three other Gulf states, but had not elaborated on what conditions would have to be met.

Asked what terms would have to change, Sheikh Abdullah said that up until last year, only the UAE had been a contender to host the joint body that would be responsible for managing and issuing Gulf currency notes and coins.

'When I say the terms, the UAE was the first country supposed to host the central bank, and we believe we had the right to do so. did not happen,' Sheikh Abdullah said.

The UAE's public outcry marks a divergence from Gulf decision-making typically kept behind closed doors to preserve an image of harmony, analysts said.

Analysts have said the UAE decision to quit monetary union marked a protest against Saudi Arabia's dominance over Gulf decision-making.-Reuters