Monday 21 May 2018

Saudi appoints new central bank head

Riyadh, December 14, 2011

Saudi King Abdullah on Tuesday appointed a new central bank governor and named a new economy minister in a limited  reshuffle of the Opec member's cabinet, which did not affect the oil ministry, state television reported.     

Analysts said some of the changes, which included the industry and trade and civil service portfolios, had been expected and do not signal a major shift in financial and monetary policy of the world's top oil exporter, but could indicate a move towards market liberalisation.

Saudi Oil Minister Ali Naimi stayed in his post despite speculation over the past year that he may retire. The veteran oil minister, who was appointed in 1995, has come to be one of the most important figures in world energy markets over the past 16 years, garnering praise for his adept handling of Opec and a high technical understanding of the oil industry.

A royal decree read out on state television said that Fahd bin Abdullah Al-Mubarak had been named as head of the Saudi Arabian Monetary Agency (Sama), or central bank, replacing Muhammad Al-Jasser, who became economy and planning minister.

Al-Mubarak has served as chairman and managing director of  Morgan Stanley Saudi Arabia and chairman of the Saudi stock market or Tadawul.

"Some of these changes were expected because they were ministers who had been in their posts a long time, like the economy and planning minister and the municipal planning minister," said Asaad Al-Shamlan, a political science professor in Riyadh.     

"Sama's cautious policy is a long-standing one that predates the current governor, so I don't expect any shifts in policy," he added.

Saudi Arabia's central bank does not run a fully independent monetary policy as it needs to keep interest rates close to US
benchmarks due to its currency peg to the dollar to prevent unwanted capital flows. That makes fiscal policy a key tool to steer the oil-reliant economy.

Monica Malik, chief economist at EFG-Hermes in Dubai, said appointing a new central bank governor with a background in investment banking and the stock market could be an indication of Saudi Arabia's gradual shift toward development of capital markets and liberalisation. - Reuters  

Tags: Saudi Arabia | Central Bank | Sama | minister | Naimi |

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