Get ‘riyal’: SR1 down to 57 halalas in 24 years

The purchasing power of a Saudi riyal has been reduced to 57 halalas during the past 24 years as a result of inflation, a study conducted by Al-Eqtisadiah business daily said.
The daily came out with the report after studying the riyal’s purchasing power from 1989 to May 2013. “A Saudi riyal in 1989 now values 57 halalas,” the paper pointed out.
The riyal’s purchasing power during 2000-2013 reduced by 35.3 percent and this means a Saudi riyal in 2000 now values 65 halalas, reducing its power to purchase goods and services.
“When the cost of living index goes up the purchasing power of riyal goes down,” the paper said. However, it pointed out that the decline in inflation rate might not increase the purchasing power of riyal.
When the cost of living index goes up in 2001 compared to 2000 by five percent, for example, the purchasing power of riyal would decline by five percent. In other words, the value of SR10,000 salary in 2000 declined to SR9,500 by 2001.
Muhammad Saleh, a Saudi economist, urged the government to take measures to control inflation and strengthen riyal, by intensifying price-monitoring systems and encouraging setting up of cooperative societies.
Abumajed Al-Bishri, another Saudi, blamed the riyal-dollar peg for the devaluation of the Saudi currency and called for linking the riyal with a basket of currencies.
According to Abuiyas Al-Johani, the purchasing power of riyal has declined considerably during the past years. “This can be easily noticed when we check prices of essential commodities like rice, milk, sugar and tea,” he added.