No Change in Riyal’s Peg to the US Dollar

Click here: Arab News – No Change in Riyal’s Peg to the US Dollar

The Saudi riyal’s peg to the US dollar will remain unchanged as GCC countries yesterday unanimously agreed to the continuation of the present exchange rate policy, Hamad Al-Sayari, governor of the Saudi Arabian Monetary Agency (SAMA), announced.

…Sayari’s statement ended speculation that the riyal-dollar peg would be lifted as part of efforts to contain growing inflation in the Kingdom. Kuwait’s central bank parted company with its GCC partners in May this year when it ended the dinar’s peg to the US dollar and linked it to a basket of currencies.

…The International Monetary Fund (IMF) said Gulf monetary policy needed to be consistent with dollar pegs, after the six states broke ranks on their response to a US interest rate cut last month, raising speculation about currency revaluations.“I think the relationship with the dollar is one alternative,” IMF Managing Director Rodrigo Rato told reporters after meeting the GCC finance ministers and central bank governors. “That alternative requires following a monetary policy that is coherent with that alternative,” he said.

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