SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: redfrecknj9/5/2005 5:44:14 PM
   of 110194
 
Saudi Arabia Riyal looks to Re-align
RIYADH – China's revaluation of the yuan increases the possibility of the re-alignment of the Saudi Riyal to a weak U.S. dollar especially while trading links with Asia and Europe continue to grow.

Saudi Arabia and many Gulf countries have pegged their currency to the dollar for years. Weakness in recent years of the dollar and the growth in Asian and European imports have cut into the purchasing power of the Gulf countries, whose export earnings from oil are also denominated in dollars.

The value of Gulf Arab imports from China, which were negligible just a decade ago, grew last year to $14.5 billion, or 8.5 percent of total imports.

While record oil prices may mask the impact of costlier goods, economists say the case for linking to a basket of currencies instead of the dollar – just like China – is gaining ground.

"There is a gathering debate about this," said Daniel Hanna, an economist with Standard Chartered bank in Dubai.

"The majority of the Gulf trade is with Asia and the European Union. You can make a case that the currency peg should reflect that better, especially since China will be their fastest growing partner," he said.

One vocal advocate of swift change, National Commercial Bank senior economist Nahed Taher, says Saudi Arabia cannot afford to wait until 2010 to loosen ties between the riyal (SAR-) and the dollar which have been fixed since 1987.

Taher has called for a managed float of the riyal against a basket of currencies, within a 5 percent band, arguing that costlier imports are partly responsible for pushing annual inflation up to 6 percent for the last two years.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News