JEDDAH: The United Arab Emirates’ withdrawal from the GCC Monetary Union will not derail the group’s single currency plan, Saudi Arabia’s central bank governor said yesterday.
“I don’t believe that the withdrawal will affect it because there are still four countries that are excited about it,” Muhammad Al-Jasser told a meeting at the Jeddah Chamber of Commerce and Industry.
The UAE, the second-largest Arab economy, broke ranks with Saudi Arabia, Kuwait, Qatar and Bahrain last week by withdrawing from the single currency plan in protest of a May 5 decision to base the joint central bank in the Saudi capital Riyadh.
Al-Jasser dismissed the idea of lifting the riyal-dollar peg, saying the linkage between the two currencies had contributed to the Kingdom’s economic stability.
“The pegging of riyal with the US dollar has been serving the Kingdom,” he pointed out.
Asked about opening of Islamic banks in the Kingdom, the SAMA chief said Saudi Arabia has been leading the banking sector in the Gulf region, adding that most products of Saudi commercial banks conformed to Shariah regulations. He said foreign banks were allowed to open their branches in the Kingdom as part of WTO requirements.
“Saudi banks are capable of facing the competition from these foreign banks,” he added.
He said Saudi laws do not allow women to open independent bank accounts for their minor children. However, he said, women could open subsidiary accounts for children. “The objective behind this restriction is to protect the money in these accounts,” he said.
Al-Jasser was asked on prospects of allowing pilgrims to open bank accounts in order to prevent money laundering. He responded by saying they could use their credit cards and ATM cards in the Kingdom. He said there is a department at SAMA to monitor the nearly 30 insurance companies in the Kingdom in order to protect the interests of those who deal with them.