Saudi Arabia has no plans of changing peg to US dollar

October 21, 2016

Jeddah, Oct 21: The government has no plans to change Saudi Arabia’s exchange rate, Finance Minister Ibrahim Al-Assaf told a television program early Thursday.

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The MBC network’s program was broadcast hours after the Saudi government sold $17.5 billion of bonds, the largest emerging market debt sale ever, in its first international bond sale.

Analysts, quoted by Reuters, believe the bond will allow Saudi Arabia to slow the drawdown of its foreign assets to pay its bills, which is a focus of recent speculative pressure on the riyal.

Al-Assaf praised the government’s economic plans and reforms drive, saying it had impressed US President Barack Obama among others.

The international debt issue did not include Islamic bonds; Al-Assaf said the government planned to issue sukuk in future as one way to cover its budget deficit.

The bond issue prospectus noted that Saudi Arabia might eventually abandon the peg of its riyal currency to the US dollar, but the minister said that was included for legal reasons and the government has no intention of changing the exchange rate.

The Saudi stock market rose sharply as bank shares rallied after the mammoth international bond sale.

The bond issue was hailed as historic by investors.

Saudi Arabia’s Tadawul All-Share Index gained 2.3 percent, with Samba Financial shares jumping 5.2 percent.

Fitch Ratings recently noted that banks in Saudi Arabia and Qatar are better placed than GCC peers to cope with an eventual deterioration in asset quality brought about by a prolonged period of weak oil prices.

Commenting to Arab News, Eric Dupont, senior director, financial institutions, gave two key reasons for this assessment.

Dupont said: “Firstly, an operating environment that provides banks with lots of good lending opportunities and secondly strong loss absorption capacity in the form of excess loan loss reserves, excess capital and earnings generation.”

Speaking on the MBC program, Al-Assaf also said that delays in state payments to construction firms are due to “technical reasons” and the payments will increase in the coming period. He said payments to companies were now “stable” and would rise.

Mohammad Al-Tuwaijri, deputy minister of economy and planning, said Saudi Arabia would have faced bankruptcy in three to four years if it had not imposed austerity policies.

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News Network
April 23,2024

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The genocidal Israeli war on the Gaza Strip has entered its 200th day, with occupation forces killing more Palestinians in defiance of widespread international outcry to end the carnage.

The aggression marked its 200th day on Tuesday with no end in sight to the Israeli war that has so far killed a shocking number of Palestinians and led to a humanitarian crisis in the besieged territory.

The Gaza Health Ministry said Israeli forces have committed three "massacres" over the past 24 hours, killing at least 32 Palestinians and wounding 59 others.

The numbers, it added, bring the Palestinian death toll to more than 34,183, with at least 77,143 injured and an estimated 7,000 missing and presumed dead since early October.

More than 14,500 children and 9,500 women are among those killed, making up over 70 percent of the victims, according to health officials.

Israel waged its brutal US-backed war on the Gaza Strip on October 7 after the Palestinian Hamas resistance group carried out Operation Al-Aqsa Storm against the usurping entity in retaliation for its intensified atrocities against the Palestinian people.

Israel has been carrying out war crimes in Gaza by deliberately starving people and forcing their evacuation, as well as targeting hospitals and schools sheltering displaced Palestinians.

Despite all these atrocities, the regime has failed to achieve its declared objectives of “destroying Hamas” and finding Israeli captives held in Gaza.

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News Network
April 22,2024

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Some 62,000 Israeli settlers have fled areas in the northern sector of the 1948 Israeli-occupied lands amid fear of strikes by Lebanon’s Hezbollah resistance movement in retaliation for the bloody onslaught on Gaza, latest reports have revealed.

Lebanon’s al-Mayadeen television news channel, citing Israeli media outlets, reported on Sunday evening that the number of settlers that have evacuated the area as a result of Hezbollah’s operations now stands at a staggering 62,000.

The report noted that 30,000 of the settlers have evacuated northern occupied Palestine on their own as fears are mounting among the residents that Hezbollah fighters continue to carry out daily operations with no signs that they are deterred by any action the Israeli army is taking.

Israeli media outlets further noted that 40% of the evacuees are considering no return to the region.

Moreover, 38% of those who voluntarily left the area, no longer intend to return to their previous places of residence in the northern occupied territories.

This comes as Hezbollah targeted a facility housing Israeli soldiers in the Shomera settlement earlier on Sunday with a barrage of rockets.

The Lebanese resistance group also struck surveillance devices newly installed around the Dovev military barracks, completely destroying the hardware.

Hezbollah said in a statement that it attacked the deployment positions of Israeli soldiers south of the Jal al-Alam site, using heavy-caliber Burkan (Volcano) missiles.

In another statement, the resistance group announced that its fighters struck surveillance equipment at the Misgav Am military site, which Israeli forces had lately re-positioned.

Surveillance equipment at the al-Malkiya base was also targeted and destroyed, it said, adding that the operation was carried out with a salvo of rockets.

The Israeli regime has repeatedly attacked southern Lebanon since October 7, when it launched a genocidal war on Gaza that has killed at least 34,097 Palestinians, most of them women and children.

In retaliation, Hezbollah has launched near-daily rocket attacks on Israeli positions.

At least 349 people have been killed on the Lebanese border, including 68 civilians.

Hezbollah has already fought off two Israeli wars against Lebanon in 2000 and 2006. The resistance forced the regime to retreat in both conflicts.

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News Network
April 14,2024

Riyadh: Saudi Arabia on Sunday expressed deep concern over the military escalation in the Middle East and urged all parties involved to exercise restraint, the Saudi Press Agency reported, citing a statement of the Ministry of Foreign Affairs.

The Ministry of Foreign Affairs warned of "serious repercussions" on the region and its peoples from the dangers of a wider war, according to SPA.

Iran on Saturday launched drones and missiles against Israel, making good its threat to retaliate against the Israeli air strike that destroyed an Iranian embassy annex building in Damascus, Syria, killing at least 13 people, including two generals of Iran's elite Revolutionary Guard.

The Saudi ministry "affirmed the Kingdom’s position calling for the need for the Security Council to assume its responsibility towards maintaining international peace and security, especially in this region that is extremely sensitive to global peace and security, and to prevent the escalation of the crisis that will have serious consequences if it expands," said the SPA report. 

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