Saudi Arabian Monetary Agency (SAMA) and Monetary Policy

Abstract

Sitting at the head of Saudi Arabia’s financial system is the Saudi Arabian Monetary Agency (SAMA). Established by Royal Decree in 1952, it has now completed 52 years of service to the country. It has been an observer and key player in financial matters, and has seen its role expand with the evolution of the Kingdom’s economy and financial system. The history and role of SAMA encapsulates the evolution of Saudi Arabia’s banking and financial structures in the gradual institutionalization of the country’s financial market. How SAMA operates and the tools and policies it adopts, will have a great impact on all of Saudi society, not merely on the financial sector. This was openly acknowledged by the Saudi Minister of Finance, Dr. Ibrahim Al-Assaf, when he was reported as saying that, despite higher-than-forecasted oil prices during the first half of 2004, the Kingdom’s financial sector would be the “driving force” of the economy for the remainder of the year (Arab News, 13 May 2004).