Saudis Struggle to Respond as Rising Libor Pressures Dollar Peg - Bloomberg

Saudis Struggle to Respond as Rising Libor Pressures Dollar Peg - Bloomberg:

"Saudi Arabia is struggling with rising U.S. rates as it tries to strike a balance between boosting growth and averting capital flight that would put pressure on the riyal’s currency peg. Saibor, a key Saudi interbank rate for riyals, rose on Monday above the central bank’s benchmark repurchase rate -- in theory its ceiling. That means the Saudi central bank, SAMA, could face renewed pressure to raise the repo rate to keep the riyal attractive for depositors who might otherwise be tempted to shift into dollars. Saudi Arabia raised its benchmark rate on March 15 for the first time since 2009, preempting the U.S. Federal Reserve increase after Saibor fell below its equivalent London rate for dollars, posing a risk of capital flight."



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