Riyadh – Mubasher: Many Saudi citizens have started to convert their deposits and salaries into US dollars, banking sources told Mubasher.
This tendency comes amid speculations over a possible devaluation of the local currency up to SAR 4, they added.
"This decision is technically and economically inapplicable unless the country has a hard currency reserve", said economic expert Hamza Al-Salm.
This move will further undermine confidence in the local currency and thus drain the country's foreign reserve, Al-Salm added.
Since the kingdom is a developing country, it has to be interlinked with a powerful currency like US dollar, said Mazen al-Sudairi, head of research at al-Istithmar Capital, adding 98% of oil and petrochemical exports are transacted in US dollar.
"This is an unjustifiable wave of fear springing from lack of awareness or confidence", al-Sudairi concluded.
