DOLLAR RULES

Mohammad Al-Jasser, Governor of Saudi Arabian Monetary Agency (SAMA) said that he believed the US dollar will remain the world’s key foreign reserve currency. Participants at the Jeddah Economic Forum also discussed the growing role of emerging market economies in helping steer the world through its worst recession in over six decades. He said that the dollar was still pre-eminent in its role as a reserve currency despite Euro gaining ground. He dismissed as untenable the idea of using the IMF’s Special Drawing Rights – a quasi-currency used by the IMF in its dealings with member governments – as an international reserve currency. Saudi Arabia’s foreign currency reserves, which are in excess of $400 billion, are largely held in dollars. The Kingdom is also a driving force behind efforts to set up a unified Gulf currency. It, along with Kuwait, Qatar and Bahrain, is pushing ahead with the plan while Oman and the UAE have said they will not participate.