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Saudis keep forex policy unchanged
Saudi Arabia would not change its foreign exchange policy for now to tackle near-record inflation, the finance minister and central bank governor told a council that advises the king on Sunday, one of the councillors said.
- Reuters
- Published: 00:08 February 18, 2008
Riyadh: Saudi Arabia would not change its foreign exchange policy for now to tackle near-record inflation, the finance minister and central bank governor told a council that advises the king on Sunday, one of the councillors said.
In a meeting to discuss how to fight rising prices, the Shura Council did not debate the possibility of revaluing the dollar-pegged Saudi riyal against the dollar, Osama Abu Gherara, deputy chairman of the Shura Council's finance committee, said.
"Nothing was said about a revaluation," Abu Gherara said by telephone after the meeting.
"We were not led to believe that there will be a change for now," Abu Gherara said, referring to monetary and foreign exchange policy of the kingdom, which has fixed its riyal to the dollar at 3.75 since 1986.
He declined to be more specific. Revaluing the riyal could help tackle inflation, Abu Gherara was quoted as saying in Asharq Al Awsat.
Inflation in the world's largest oil exporter, whose economy has surged as oil prices rose almost fivefold since 2002, hit a 16-year peak of 6.5 per cent in December.
The Shura Council, whose members are appointed by King Abdullah, held a meeting with Finance Minister Ebrahim Al Assaf and Hamad Saud Al Sayyari, governor of the Saudi Arabian Monetary Agency, to debate how to fight price rises.
"The meeting examined the monetary and foreign exchange policies and the issue of inflation," said Ehsan Bu Hulaiga, head of the Shura Council's finance committee. Saudi Arabia must avoid taking "hasty" actions in order to tackle inflation, Bu Hulaiga said.
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