IMF Says Saudi Riyal Undervalued

Click here: – IMF Says Saudi Riyal Undervalued

The executive board of directors of the International Monetary Fund (IMF) has said that the Saudi riyal appears to be moderately undervalued at present.Many directors see this as a transitional phenomenon “reflecting the positive terms-of-trade shock.” Several other directors considered that the riyal is broadly in line with fundamentals.

The IMF directors also considered that the current pegged exchange rate regime has served the economy well, although a few directors were of the view that a more flexible exchange rate would help reduce fluctuations in the face of oil price volatility….Brad Bourland, chief economist and head of research at the Riyadh-based Jadwa Investment, told Arab News: “I agree that the currency is somewhat undervalued but this doesn’t mean it should be changed; an undervalued currency is healthy for the economy.”

He added: “More broadly the economy is enjoying what I refer to as its golden age and this should last for many years to come.”John Sfakianakis, SABB chief economist, agreed with Bourland’s views. “We continue to believe firmly that the Saudi riyal is not going to be revalued. An expected change in the currency regime will take place only if the dollar weakens at an alarming rate and is sustained over the medium term.”


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: