Saudi advisors may back riyal revaluation
Riyadh, July 15, 2008
A Saudi council that advises the king is likely to accept a recommendation to revalue the dollar-pegged riyal as a measure to fight inflation, although any decision rests with the monarch, one of the members said.
An internal committee of the Shura Council, whose members are appointed by King Abdallah, wrote a report urging the world's top oil exporter to revalue the riyal, Waleed Arab Hachem, the Shura council member who made the proposal, said.
"The committee, that is doing the report, asked me for a recommendation and I proposed a revaluation," Hachem told Reuters on Tuesday. "It's logical to keep the peg to the dollar but the peg is not sacred, (the riyal) should be revalued," he said.
The report included other recommendations to tackle inflation near a more than 30-year peak. "The discussion of the report started yesterday and we are also discussing it today. A vote will be held very soon, it will need approval by two-thirds of the members and I think it will move through easily," Hachem said.
Decisions of the Shura Council are not binding. Hachem said he would propose to the council "a 20 per cent revaluation because the riyal has lost 30 per cent of its value."-Reuters