Is the Saudi peg on the verge of breaking? | GulfNews.com:
"In January this year, the Saudi Arabian Monetary Authority (SAMA) issued a statement saying that the 1986 mandate which pegged the country’s Riyal to the dollar was not under threat. Roughly a week later, SAMA restricted banks operating within its territory from selling forward contracts that are betting against the Riyal.
While oil prices continue to fall and the US Dollar continues to strengthen, that currency peg might appear vulnerable to some investors. Despite the Kingdom’s sizeable foreign exchange buffers, which stand at $616 Billion as of December 2015, traders have been betting against the sustainability of the Riyal.
Is the Kingdom of Saudi Arabia able and willing to maintain its currency peg? Or will it follow in the footsteps of its oil exporting counterpart Russia, who has the world’s largest foreign reserves, and de-peg its currency?"
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