French bank is expected to lower the Saudi riyal 40 to 60%
French bank is expected to lower the Saudi riyal 40 to 60%
2.4.2016 17:44
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as French bank “Societe Generale” the possibility of reducing the value of the Saudi riyal by not less than 25% in the near term, adding that “this figure could rise to 40% if oil prices remain at current levels in 2016″.
Faces riyal’s peg to the constant dollar thirty years ago under pressure in the wake of the collapse would oil prices Like other currencies pegged to the US currency region despite the announcement by the authorities of its intention to use the huge foreign exchange reserves to maintain the peg.
He said, “Societe Generale” Despite the steadfastness link in past periods of falling oil prices and the rise of the dollar, but it seems to be different this time. ”
He said the bank,” stop the possible collapse of connectivity over the ability and willingness to defend the system, whatever the cost, to test the market will of the authorities, and rightly so. ”
He estimated the bank ratio the possibility of reducing the value of the riyal or a change in the exchange rate system by about 60% if oil prices remain below $ 50 a barrel in the next two years. ”
” it is still the risk premium suggest that it is better to modify or cancel the bet on the linkage centers.
the “Societe Generale “to, that” the public budgets Gulf looks in a worse situation than it was in the past, adding that Saudi Arabia, which had set the price in the international oil markets in the past, has become a recipient of the price with the decline in their ability to influence the markets. ”
the bank said,” the Gulf economies are increasingly decoupled from the United States, “adding,” All the factors mentioned make the adoption of more flexible exchange rate as desirable “.anthy
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