Saudi Arabia : Selected Issues

Information about Middle East Oriente Medio

Journal Issue

Volume/Issue:: 2015/286
Series:: IMF Staff Country Reports
Author(s):: International Monetary Fund. Middle East and Central Asia Dept.
Publisher:: INTERNATIONAL MONETARY FUND
Published Date:: October 2015
DOI:: http://dx.doi.org/10.5089/9781513505077.002
ISBN:: 9781513505077
ISSN:: 1934-7685
Page:: 85

This Selected Issues paper assesses the importance of oil and interest rate spillovers for Saudi Arabia. Oil prices have fallen by more than 40 percent since mid-2014 while the Federal Reserve is expected in the coming months to begin raising its policy rate at the beginning of a gradual tightening cycle. Given the importance of oil to the economy and the peg of the riyal to the U.S. dollar, these are two key developments for Saudi Arabia. Although a temporary drop in oil prices would likely have little effect on the economy and banks given the financial cushions that have been built-up, a longer-lasting period of low oil prices would have a more significant impact.

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Saudi Arabia - Selected Issues