The Saudi Arabian Monetary Agency, 1952-2016

1. Front Matter

   Pages i-xxi

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2. Background to Saudi Arabia’s Financial Challenges

   • Ahmed Banafe, Rory Macleod

   Pages 1-14

3. History

   1. Front Matter

      Pages 15-15

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   2. Discovery of Oil and the Founding of the Saudi Arabian Monetary Agency, 1902–1952

      • Ahmed Banafe, Rory Macleod

      Pages 17-32

   3. Financial Development before the First Oil Crisis, 1953–1974

      • Ahmed Banafe, Rory Macleod

      Pages 33-48

   4. Petrodollar Recycling and Saudization of the Banking System, 1975–1982

      • Ahmed Banafe, Rory Macleod

      Pages 49-76

   5. Declining Foreign Exchange Reserves and Iraq’s Invasion of Kuwait, 1983–1993

      • Ahmed Banafe, Rory Macleod

      Pages 77-108

   6. Low Oil Prices, Rising Government Debt and External Crises, 1994–2004

      • Ahmed Banafe, Rory Macleod

      Pages 109-134

   7. Impact of the Global Financial Crisis and Its Aftermath, 2005–2016

      • Ahmed Banafe, Rory Macleod

      Pages 135-165

4. SAMA in the Modern World

   1. Front Matter

      Pages 167-167

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   2. The Future of Gulf Monetary Union

      • Ahmed Banafe, Rory Macleod

      Pages 169-191

   3. Foreign Exchange Reserves Management – SAMA’s Experience

      • Ahmed Banafe, Rory Macleod

      Pages 193-212

   4. Developing the Domestic Bond Markets

      • Ahmed Banafe, Rory Macleod

      Pages 213-223

   5. Currency Regime and Monetary Policy

      • Ahmed Banafe, Rory Macleod

      Pages 225-244

   6. SAMA and the International Monetary System

      • Ahmed Banafe, Rory Macleod

      Pages 245-262

   7. The Saudi Banking System

      • Ahmed Banafe, Rory Macleod

      Pages 263-285

   8. SAMA and the Future

      • Ahmed Banafe, Rory Macleod

      Pages 287-299

5. Back Matter

   Pages 301-330

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This book sheds new light on the critical importance of the Saudi Arabian Monetary Agency (SAMA), a remarkably successful central bank that is a model for developing oil exporters worldwide. As a "swing producer", Saudi Arabia has traditionally stepped in to make up for oil supply shortfalls in other OPEC countries, or to scale back their own production when overabundance might lead to a price crash. Since 2014, Saudi Arabia has changed its policy in response to the rise of American shale oil, in search of a long-term strategy that will, once again, help balance supply and demand at a steady price. In its informal dual role of central bank and sovereign wealth fund, SAMA must navigate the paradoxes faced by monoline oil producing countries: the need for diversification vs. dependence on oil-based revenue; the loss of foreign exchange reserves that follows oil-financed government spending; the unreliability of revenue from oil; the challenges of using a Western model for supervising Shariah-compliant banks; and the need to have a balancing mix of oil and financial assets. As SAMA (now the Saudi Arabian Monetary Authority) reassesses its role in 2017, this history and guide to current policy issues will prove invaluable for policymakers in oil producing economies looking to apply lessons from the past as they plan for the future. 

• Gulf Cooperation Council
• Gulf Monetary Council
• Saudi Arabian Riyal Interbank Express (SARIE)
• Vision 2030
• Aramco
• Ibn Saud
• Keynesian multiplier
• islamic banking
• islamic finance
• domestic debt
• diversification
• currency
• banks
• equities
• bonds
• Sharia-compliant

• Saudi Arabian Monetary Authority , Riyadh, Saudi Arabia

  Ahmed Banafe

• Objective Analysis Ltd. , London, United Kingdom

  Rory Macleod

Ahmed Banafe is a Senior Investment Advisor at SAMA, with a career spanning forty-four years. He is the author of Saudi Arabian Financial Markets (1993) and several Bank for International Settlements papers.



Rory Macleod is Managing Director of Objective Analysis Ltd. He first served as an advisor in SAMA’s investment department from 1985 to 1989 and has since worked with SAMA in various roles.

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