Saudi Arabia will maintain its currency peg to the dollar as oil continues to remain the dominant force fueling its economy, Fahad Al-Mubarak, governor of the Saudi Arabian Monetary Agency (SAMA), the kingdom’s central bank, told Bloomberg Television.
“Definitely we’re solid and confident that this is a good policy for our exchange rate,” Al-Mubarak said. “Stability is very important to the Saudi government, to Saudi investors and international investors.”
His comments came on the sidelines of a G20 meeting, which gathered global finance chiefs in Ankara, Turkey.
Speculation has grown recently among some investors over the prospect of the Saudi riyal being forced to drop its dollar peg amid declining oil prices. One-year forward contracts for the currency are near the highest mark since 2003.
The Saudi stock market’s weaker performance in recent months was not a major concern, he said, as he sees such losses resulting from volatility in global markets and speculation. The former Morgan Stanley banker added that he expects the country’s economy to grow, “especially in the private and non-oil sectors.”
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