Saudi foreign reserves remain strong, currency peg ‘anchor’ of stability, says SAMA

Saudi Arabia’s foreign reserves remain strong and are large enough to cover 43 months of imports, the Kingdom’s central bank said on Monday.

In a statement, the Saudi Arabian Monetary Authority (SAMA) said its policy of pegging the Saudi riyal to the US dollar was a strategic choice which had contributed to the economic growth of the Kingdom for over three decades.

“The current exchange rate arrangement is a primary driver for monetary stability and sustainable economic growth,” SAMA said.

“SAMA remains committed to maintaining the exchange rate at the official rate of 3.75 riyals to the dollar as an anchor of monetary and financial stability,” the statement added.

SAMA said last week that Saudi foreign assets fell in March to $464 billion, the lowest in 19 years, as the Kingdom moves to combat the economic fallout of the coronavirus pandemic.

Finance Minister Mohammed al-Jadaan told Al Arabiya on Saturday that the Kingdom is committed to protecting itself from the economic fallout of the coronavirus through any necessary financial measures despite plunging oil revenues.

Earlier last week, the Kingdom reported that its budget had fallen into a $9 billion deficit after oil revenue plunged amid a global oversupply of crude due to the coronavirus pandemic. Despite oil being Saudi Arabia’s largest revenue, the Kingdom maintains significant reserves and has vast untapped borrowing potential.