Nicosia, Mar 9 : The Saudi Government has ignored calls from members of the Shoura Council to break the riyal's peg to the US dollar.
The Vice Governor of the Saudi Arabian Monetary Agency Dr. Muhammad al-Jasir said a few days ago that the Kingdom would continue to price its oil exports in dollars rather than euros.
He said that calls to peg the Saudi currency to the euro were politically motivated and stressed that the Saudi economy had benefited a lot from the link to the dollar. The peg is 3.75 riyals to the dollar.
Dr. Jasir said that it that was not the first time that the value of the dollar had weakened, nor it would be the last.
He pointed out that Kuwait which had de-linked its local currency from the basket of currencies it was using did not see a lower inflation.
In February, tMinister of Financehe Saudi Finance Minister Ibrahim Al-Assaf told a meeting of the Shoura Council that breaking the riyal's peg to the US dollar was "a bad idea."
The Minister, who was invited to the Shoura to discuss mounting problems like inflation and rising cost of living, refused to end the riyal-dollar exchange rate peg, saying that other countries that freed up their currencies from the dollar have still not succeeded in curbing inflation.
"This continuity was based on economic and not political factors," Al-Assaf told the Council.
"Also, the Kingdom's revenues are in dollars and the objective is to increase the competitiveness capability for the Kingdom's dollar-denominated exports," Al-Assaf added.