Saudi Arabia’s non-oil sector of the economy is still healthy and the private sector will continue to grow, stimulated by reforms, the Saudi central bank governor said on Thursday.
Ahmad Al Kholifey, governor of the Saudi Arabian Monetary Authority (SAMA), also said international cooperation was needed to assess the risks and impact of crypto-currencies.
“We warned the public that be careful there is no legal framework protecting you and we need really to understand more and this is what you hear in the international area when you go to meetings, they have the same feeling,” he said at an investment conference in Riyadh..
“I think it means more international efforts to assess the impact of crypto-currencies on financial stability and the financial system in general,” he said.
The pace at which Saudi Arabia’s foreign reserves are falling has slowed and any further fall will depend on government fiscal policy, the Saudi central bank governor further said, adding that he was very comfortable with the current level. Al Kholifey said in comments on government policy: “I don’t know what is their choice of either drawing their reserves or borrowing ... Of course, they are reducing now the deficit which is good. It’s more disciplined fiscal policy right now.”
He added that he would only stimulate exports via a flexible exchange rate after the economy was more diversified but it was not at that stage yet, so exchange rate policy had to remain stable. The riyal currency is now pegged to the US dollar.
Further commenting on the country’s non-oil sector of the economy, Al Kholifey said it is still healthy and the private sector will continue to grow, stimulated by reforms.
StanChart CEO talking to Saudi regulators about banking licence
Standard Chartered Chief Executive Officer Bill Winters said he’s talking to regulators in Saudi Arabia to understand the requirements to get a license to open branches in the kingdom, which could add another emerging market to more than 70 countries where the British bank does business.
“The ground rules for what is required for the banking license” are “evolving, as are so many other things in Saudi right now,” Winters said on the sidelines of a conference in Riyadh on Wednesday. “We continue to have conversations with the regulator to understand what the requirements are, and how we can best meet them, and can support the kingdom towards its 2030 vision.”
The lender already has a license from the Capital Markets Authority, which allows it to pitch for local advisory work, including IPOs and takeovers in which the target company is based in the kingdom. It’s now seeking to become more active in the oil-rich nation, Winters said.
Only a handful of international banks, such as JPMorgan Chase, Deutsche Bank and BNP Paribas, currently have licenses to open branches in the kingdom. HSBC, Royal Bank of Scotland and Credit Agricole operate in the country through minority stakes in local lenders.