SAMA not concerned about the US government shutdown

SAMA not concerned about the US government shutdown
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Published October 6th, 2013 - 10:57 GMT via SyndiGate.info

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Fawaz H. Al-Fawaz, a Riyadh-based economic consultant, said: “There is no risk to Saudi financial system, as the Saudi riyal is pegged to the dollar.
Fawaz H. Al-Fawaz, a Riyadh-based economic consultant, said: “There is no risk to Saudi financial system, as the Saudi riyal is pegged to the dollar.

The Saudi Arabian Monetary Agency (SAMA) is not worried about the political deadlock in Washington that could cause the US to default on its debt, Gov. Fahad Al-Mubarak said on Saturday.

Al-Mubarak made the comments on the sidelines of meetings held by Gulf Arab monetary and finance officials in Riyadh, Reuters reported.

Fawaz H. Al-Fawaz, a Riyadh-based economic consultant, said: “There is no risk to Saudi financial system, as the Saudi riyal is pegged to the dollar.

He told Arab News: “The US dollar is a reserve currency. All US debt is in dollars and they have no reservations in issuing more dollars to deal with debt problems.”

John Sfakianakis, chief investment strategist at Masic, said: “Markets are not expecting a surprise from the US in terms of either a default or no agreement at all. Common sense will prevail and there will be positive momentum this week, as there have been signs pointing in that direction.” 

However, Sfakianakis said: “The repercussions of a US default will be catastrophic for the global economy, but we are far from that. Just like in the past, an agreement was reached and politicians put their views aside for the common good.”

Al-Fawaz said: “As long as the dollar is an anchor in the international financial system, the US will have the ability to deal with their monetary policy. They will be able to deal with debt issue.”

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