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No change in Saudi currency policy

Saudi Arabia ruled out any changes to its dollar-pegged exchange rate yesterday, driving the riyal to a 13-month low as markets rolled back expectations of a currency revaluation by the world's biggest oil exporter.

  • Reuters
  • Published: 00:00 January 16, 2007
  • Gulf News

Riyadh: Saudi Arabia ruled out any changes to its dollar-pegged exchange rate yesterday, driving the riyal to a 13-month low as markets rolled back expectations of a currency revaluation by the world's biggest oil exporter.

Speculation about a revaluation gathered momentum last week after the UAE said central banks of Gulf oil producers were reviewing pegs to the falling dollar and could agree on a policy shift as early as a meeting in March.

But Saudi Arabian Monetary Agency (Sama) dismissed any suggestion of a riyal revaluation this year, becoming the third of the six Gulf central banks to say it planned to stand by a currency regime set up to prepare for monetary union in 2010.

"This is not on the agenda and we have no plan to change our position," Sama Governor Hamad Saud Al Sayyari told Reuters.

Asked whether Saudi Arabia, the largest Arab economy, would revalue the riyal in the coming months, he said: "No, No... [not] this year."

The riyal dipped to 3.7512 per dollar, its lowest since December 2005, after Sayyari's comments.

The riyal, like other Gulf currencies, has been firming since Thursday when UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi told Reuters Gulf states could decide at a March meeting in Riyadh, whether to keep or change their exchange rate regime.

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