Saudi Arabia’s central bank faces biggest overhaul in decades

SourceFinancial Times
SectorFinancial Services
CountrySaudi Arabia

Saudi Arabia’s central bank is set for its most significant changes in decades as a new law comes into force this month that analysts say will formalise Crown Prince Mohammed bin Salman’s efforts to divert more of the kingdom’s oil wealth to back his grandiose investment plans. The reforms — in which supporting economic growth will become part of the Saudi Arabian Monetary Authority’s mandate and the bank reports directly to the king — could diminish its role of investing the nation’s hard currency surpluses in favour of the sovereign wealth fund chaired by the crown prince, analysts say. It also underscores the kingdom’s radical shift from being a conservative investor to a more aggressive and higher-risk approach favoured by Prince Mohammed, King Salman’s favourite son and the nation’s day-to-day ruler. Mohammed al-Jadaan, the finance minister, told the Financial Times that the changes would not affect Sama’s core responsibilities, including maintaining sufficient reserves to protect the riyal-dollar peg and financial stability, as more...