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Dubai: Saudi Arabia's finance minister warned investors against the betting on an appreciation of the dollar-pegged riyal and said in a television interview that the kingdom had no plans to change currency policy.
There was no disagreement on currency policy among six Gulf Arab oil producers, whose rulers are meeting in the Qatari capital Doha, Ebrahim Al Assaf said in an interview aired by Saudi-owned Al Arabiya television yesterday.
"There is no disagreement on this subject," Assaf said.
"This topic was not discussed. It wasn't even proposed to be included in the agenda," he said in response to a question about the dollar peg.
"There is no change in the policy of the kingdom. And I think that applies to other Gulf states as well," Assaf said, warning investors against betting on riyal appreciation.
Meanwhile, the Saudi riyal hit a two-week low against the dollar yesterday.
"The market is trading the information," said Michael Ganske, head of emerging markets research at Commerzbank.
"There was an expectation that something would come out of the meeting as there was a perfect set-up with dollar weakness - and in the end they didn't do it."
The riyal had already weakened earlier in the session, moving further away from recent 21-year highs. Speculation about a revaluation of Gulf currencies such as the riyal and the dirham has boosted these currencies in recent weeks.
The riyal weakened as far as 3.74 per dollar, a drop of 1.5 per cent from the highs hit last week, but recovered slightly after Bahrain's foreign minister said there was "no decision yet" on revaluations. One-year riyal forwards also showed their lowest discount in two weeks.
The dirham hit the day's lows at 3.6711 per dollar, down 0.5 per cent from 21-year highs tested in the previous session, but one-year forwards continued to discount a 3.7 per cent revaluation of the currency.
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