Saudi central banker sees no threat to currency's dollar peg

By Onur Ant Ryan Chilcote Alaa Shahine
Bloomberg News
Sunday, September 6, 2015

Central bank Governor Fahad Al-Mubarak said Saudi Arabia will stick with its currency peg as long as oil underpins the economy, dismissing speculation that the country's currency system is coming under pressure.

Investors have increased bets that Saudi Arabia and others in the region will be next to drop their pegs after China devalued the yuan and Kazakhstan allowed its currency to float. One-year forward contracts for the Saudi riyal, an indicator of where investors expect it to trade, are near the highest since 2003.

"Looking at our economy now, in the near future and for many years to come, oil will be dominant in our economy so keeping the peg will be our policy," Al-Mubarak said in a Bloomberg Television interview in Ankara, where he attended the G-20 meeting of global finance chiefs. "Stability is very important to the Saudi government, to Saudi investors, and international investors." ...

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