Saudi Arabia does not intend to change the riyal currency's peg to the dollar, the kingdom's central bank governor confirmed on Monday after last week the United Arab Emirates raised the prospect of a region-wide revaluation.
Saudi Arabia, the Gulf region's biggest economy, is the third of the six Gulf Cooperation Council (GCC) states to rule out a shift in exchange rate policy since the UAE said on Thursday stated Gulf central bankers were reviewing pegs to the declining dollar. "This is not on the agenda and we have no plan to change our position," Hamad Saud al-Sayyari, governor of the Saudi Arabian Monetary Agency, told Reuters.
On Sunday, Bahrain's central bank governor also said the kingdom would not change its policy on pegging the dinar currency to the US dollar. "I have said repeatedly that our policy is not going to change and our position still stands," Rasheed Al Maraj was quoted as saying.
UAE Central Bank Governor Sultan Nasser al-Suweidi told Reuters on Thursday the Gulf nations could decide as early as March, when they meet in Saudi Arabia, whether to keep or change their exchange rate regime. The rising cost of non-dollar imports was one reason GCC central bank governors were reviewing the pegs, Suweidi said.
Currently, all the Gulf countries hold over 70 per cent of their reserves in US dollars. The six Gulf central banks together hold more than $250 billion in reserves.