Riyadh: Saudi Arabia has replaced its central bank governor, saying that it would more than double the size of its sovereign wealth fund by 2025 in a series of late-night announcements ahead of the crown prince’s flagship investment conference.
Ahmed Alkholifey was removed from his position heading the monetary authority. He is being replaced by Fahad Al-Mubarak, who was central bank governor from 2011 to 2016. The reason for the change wasn’t provided.
Al-Mubarak had most recently been a minister of state and served as the kingdom’s sherpa during its presidency last year of meetings of the Group of 20 industrialised economies. He was also previously chairman of Morgan Stanley’s Saudi Arabia unit. Alkholifey was simultaneously appointed an adviser to the royal court.
The central bank and the sovereign fund are set to play an increasingly important role in powering the domestic recovery as the government looks to boost an economy hit by the twin shocks of the coronavirus pandemic and low oil prices. The central bank’s mandate was recently expanded to include supporting economic growth, while the crown prince has said the wealth fund would invest US$40bil a year domestically.
“As the governor of a central bank with a pegged currency, the role isn’t the classic one of setting interest rates. The importance of the post is in being the custodian of the country’s foreign exchange reserves, ” said Ziad Daoud, chief emerging-markets economist at Bloomberg Economics.
Saudi Arabia pegs its currency to the dollar and tends to move in lockstep with the US Federal Reserve.
The change in leadership is unlikely to affect the central bank’s policy, with most levers of decision making in the kingdom controlled by Crown Prince Mohammed Bin Salman. — Bloomberg
Did you find this article insightful?