- Title: Saudi demand for US dollars falls after Congress' JASTA move
- Date: 29th September 2016
- Summary: RIYADH, SAUDI ARABIA (SEPTEMBER 29, 2016) (REUTERS) VARIOUS OF TRAFFIC ON BUSY ROADS VARIOUS OF EXTERIOR OF A MONEY EXCHANGE POSTER OF MONEY EXCHANGE WITH USD100 NOTE / ARABIC AND ENGLISH WRITING (AL SAYARI EXCHANGE) VARIOUS OF CURRENCY COUNTING MACHINE PROCESSING U.S. DOLLARS VARIOUS OF MAN EXCHANGING AND COUNTING MONEY (SOUNDBITE) (Arabic) ASSISTANT MANGER OF AL-SAYARI EXCHANGE COMPANY, RA'ED AL-SAYARI, SAYING: "Since the Congress issued its decision yesterday, the dollar has appreciated (in value), and so there's been less demand here. People are reluctant to buy dollars. They don't want them because of the price. We're concerned that if the dollar keeps appreciating and the situation doesn't stabilize in the coming days there will be no demand for dollars. This would be a big loss for the market." VARIOUS OF TRAFFIC ON BUSY ROADS VARIOUS OF ECONOMIST WITH THE JEDDAH-BASED GULF RESEARCH CENTRE, JOHN SFAKIANKIS, SPEAKING TO REPORTER (SOUNDBITE) (English) ECONOMIST WITH THE JEDDAH-BASED GULF RESEARCH CENTRE, JOHN SFAKIANKIS, SAYING: "Well, we haven't seen any official reaction but my own feeling is that defiantly the government will perceive this as something with a lot of emotion attached to it. Understandably, it's before the elections so a lot of American government officials and congress wants to show that its very closed to its citizens so it cares more about the votes than the relationship." REPORTER ASKING QUESTION (SOUNDBITE) (English) ECONOMIST WITH THE JEDDAH-BASED GULF RESEARCH CENTRE, JOHN SFAKIANKIS, SAYING: "If it has legal angles, so if it does lead to lawsuits actually happening, definitely Saudi Arabia and the relations with the U.S. will be impacted. There is no doubt. However, there will be a period of wait and see, and there will be a period where people are watchful and want to understand what are the legal ramifications." SFAKIANKIS AND REPORTER TALKING VARIOUS OF TRAFFIC ON BUSY ROADS
- Embargoed: 14th October 2016 18:20
- Keywords: Riyadh Congress John Sfakiankis JASTA
- Location: RIYADH, SAUDI ARABIA
- City: RIYADH, SAUDI ARABIA
- Country: Saudi Arabia
- Topics: Currencies/Foreign Exchange Markets,Economic Events
- Reuters ID: LVA00151METS7
- Aspect Ratio: 16:9
- Story Text: The Saudi riyal fell against the U.S. dollar in the forward foreign exchange market on Thursday (September 29) after the U.S. Congress voted to allow relatives of victims of the Sept. 11 attacks to sue Saudi Arabia.
Any legal action could take years to wind through the U.S. court system, and analysts said there might be little if any impact on the Saudi economy or state finances.
Assistant Manager of Al-Sayari Exchange Company in Riyadh, Ra'ed Al-Sayari said demand for U.S. dollars had fallen with the price moves.
"Since the Congress issued its decision yesterday, the dollar has appreciated (in value), and so there's been less demand here. People are reluctant to buy dollars. They don't want them because of the price. We're concerned that if the dollar keeps appreciating and the situation doesn't stabilize in the coming days there will be no demand for dollars. This would be a big loss for the market," he said.
John Sfakiankis, an economist with the Jeddah-based Gulf Research Centre, said there had been no official reaction yet.
"My own feeling is that defiantly the government will perceive this as something with a lot of emotion attached to it. Understandably, it's before the elections so a lot of American government officials and congress wants to show that its very closed to its citizens so it cares more about the votes than the relationship," he said.
But the decision by Congress was an unwelcome reminder of political and financial pressures on Riyadh as low oil prices strain its budget.
The Senate and House of Representatives voted overwhelmingly on Wednesday to approve legislation that will allow the families of those killed in the 2001 attacks on the United States to seek damages from the Saudi government.
Riyadh has always dismissed suspicions that it backed the attackers, who killed nearly 3,000 people under the banner of Islamist militant group al Qaeda. Fifteen out of the 19 hijackers were Saudi nationals.
The Saudi government financed an extensive lobbying campaign against the "Justice Against Sponsors of Terrorism Act", or JASTA, in the run-up to the vote, and warned it would undermine the principle of sovereign immunity.
But Saudi officials who had lobbied against the bill stopped short of threatening any retaliation if the law was passed.
There was no official reaction from Saudi Arabia after the votes, and in the short-term, few expect little more than a curt statement of disapproval from Riyadh.
The long-standing alliance between the kingdom and the United States is one of the cornerstones of Middle East politics, security and trade, and in their reactions on Thursday some Saudis said JASTA would jeopardise what they see as an interdependent relationship. - Copyright Holder: REUTERS
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