Site map
العربية Български 中文 Čeština English Français Deutsch हिन्दी Bahasa Indonesia Italiano Bahasa Malay اردو Polski Português Română Русский Srpski Slovenský Español ไทย Nederlands Українська Vietnamese বাংলা Ўзбекча O'zbekcha Қазақша

InstaForex Client Area

  • Personal settings
  • Access to all InstaForex services
  • Detailed statistics and reports on trades
  • Full range of financial transactions
  • System of managing several accounts
  • Maximum data protection

InstaForex Partner Area

  • Full information on clients and commissions
  • Graphic statistics on accounts and clicks
  • Webmaster instruments
  • Ready-made web solutions and wide range of banners
  • High data protection level
  • Company's news, RSS feeds, and forex informers
Register account
Affiliate Program
cabinet icon

Another Lamborghini from InstaForex!Maybe it will be you who will take the keys!

Just make a deposit of at least $1,000 to your account!

Get the best trading conditions and attractive bonus offers! We have already given 6 legendary sports cars! But it does not stop there! The next Lamborghini Huracan of the latest generation may be yours!

InstaForex – invest in your victories!

Instant account opening

Get a letter of instructions
toolbar icon

Trading Platform

For mobile devices

For trading via browser

Saudi Arabias pains are visibly on the rise as the economy facing threats of downgrades, if it fails to check on its ballooning fiscal deficit, which is projected to be 15-16% of GDP this year. In a separate article, we noted banks remain very vulnerable, facing threats of not only no deposit growth but net deposit withdrawal, due to its strong linkages to oil.

Saudi Arabia in the midst of economic turmoil has pledged to maintain its peg with United States Dollar at Real 3.75 per Dollar. But FX reserve is bleeding badly to protect the peg and to alleviate pressure from domestic economy from lower oil price, operating under fixed exchange rate regime.

Since, 2014 after reaching its peak in August, Saudi Arabias FX reserve declined by 20.5% according to latest data from February, 2016. It is now hovering at levels seen in 2012, around $592.7 billions. In January alone it lost close to $94 billion worth of reserves.

Expect Saudi Arabias reserve to decline further not only just due to larger deficit and lower oil price but also due to the fact increase in Reserve showing strong correlation with increase in U.S. Federal Reserve balance sheet.

The pain is likely to rise, when FED balance sheet actually starts to shrink.

However, shifting the fixed rate range weaker may not solve purpose. Speculative forces could ramp up pressure for further weakness. All in all SAMA (Saudi Arabias Monetary Authority) is in a tough spot.

Chart courtesy tradingeconomics.com