Saudi Arabia warnings over "currency war"

Saudi Arabia warnings over "currency war"
2.5 5

Published January 27th, 2013 - 09:48 GMT via

Rate Article:

PRINT Send Mail
comment (0)
Saudi Arabia has warned against a currency war, saying it would hurt the global economy
Saudi Arabia has warned against a currency war, saying it would hurt the global economy
Follow >
Click here to add Bank of Japan as an alert
Bank of Japan
Click here to add Davos as an alert
Click here to add Federal Bank of Germany as an alert
Federal Bank of Germany
Click here to add G20 as an alert
Click here to add Ibrahim Al-Assaf as an alert
Ibrahim Al-Assaf
Click here to add Jens Weidmann as an alert
Jens Weidmann
Click here to add Moscow as an alert
Click here to add Shinzo Abe as an alert
Shinzo Abe
Click here to add World Economic Forum as an alert
World Economic Forum

Devaluation of currency by certain countries to make them more competitive in the global market has raised fears of a “currency war” — a move that Saudi Arabia says would have a negative impact on the world economy.

This is not a healthy trend for world economy and trade exchange between countries,” said Finance Minister Ibrahim Al-Assaf when asked about the currency war. “Saudi riyal is directly linked with US dollar,” the minister said, adding the change in exchange rates would have a direct impact on the competitiveness of Saudi exports as well as on its imports.

Speaking to Al-Arabiya TV channel at the World Economic Forum in Davos, Al-Assaf said the issue would be discussed either at the upcoming G20 meeting in Moscow next month or in the next meeting in the US.

The currency war surfaced after the Bank of Japan announced plans to make open-ended asset purchases in an effort to re-inflate the Japanese economy, which recently slipped into recession.

Jens Weidmann, president of Germany’s central bank, criticized the BoJ for caving under pressure from newly elected Prime Minister Shinzo Abe.

Weidmann warned that the bank risks losing its independence, which could lead to a “politicization of exchange rates.”

Copyright: Arab News © 2012 All rights reserved.

Add a new comment