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10 June 2023

Saudi should review dollar peg: state bank

By Agencies
Saudi Arabia should review its policy of pegging the riyal currency to the weak US dollar, said the chief economist of state-owned National Commercial Bank (NCB), the kingdom's largest lender by assets.

"Time has come to reconsider the continued pegging of the Saudi riyal to US dollar...taking into account unfavourable impact on official reserves which are mostly denominated in dollar," Said al-Shaikh said in a statement.

The government of the world's largest oil exporter invests most of its surplus revenues in US Treasuries, Shaikh said.

"The continuing weakness of the dollar and declining interest rates would shrink returns achieved by these investments," he said.

Saudi Arabia has not changed the riyal's exchange rate since 1986, and government officials, including the finance minister and central bank governor, have repeatedly ruled out severing the peg. (Reuters)