Foreign Exchange Intervention in Saudi Arabia

6 Pages Posted: 6 Oct 2014

See all articles by Abdulrahman Al-Hamidy

Abdulrahman Al-Hamidy

Saudi Arabian Monetary Agency

Ahmed Banafe

Saudi Arabian Monetary Agency

Date Written: October 2013

Abstract

Saudi Arabia has a fixed exchange rate regime, with a dollar peg. The spot USD/SAR exchange rate has remained unchanged at 3.7500 since June 1986, as SAMA provides dollars to the domestic banks to meet the commercial and financial demand of the private sector. SAMA FX intervention has been discretionary and infrequent, mainly in the forward market, to stem speculative activity linked to external or domestic factors. It has not been SAMA policy to intervene for broader economic objectives, such as controlling inflation, maintaining competitiveness or regulating the amount of FX reserves, as these are amply addressed by fiscal measures rather than FX intervention in a pegged exchange rate regime, which is the economy's nominal anchor.

Full publication: Market Volatility and Foreign Exchange Intervention in EMEs: What Has Changed?

Keywords: FX intervention, Al-Hamidy, Banafe

JEL Classification: F31

Suggested Citation

Al-Hamidy, Abdulrahman and Banafe, Ahmed, Foreign Exchange Intervention in Saudi Arabia (October 2013). BIS Paper No. 73v, Available at SSRN: https://ssrn.com/abstract=2474007

Abdulrahman Al-Hamidy (Contact Author)

Saudi Arabian Monetary Agency

Saudi Arabia

Ahmed Banafe

Saudi Arabian Monetary Agency

Saudi Arabia

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