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Saudi Arabia Studies Issuing Three Banking Licenses, Establishing a Digital Currency | ASHARQ AL-AWSAT English Archive 2005 -2017
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Saudi Arabia’s central bank governor Ahmed Al-Kholifey gestures during a news conference in Riyadh on Wednesday, Photo taken by : Saad al-Anzi, Asharq Al-Awsat

Riyadh – The Saudi Arabian Monetary Agency (SAMA) expected positive growth rates for the Saudi economy over the upcoming period, confirming that the national economy achieved a 1.7% growth so far, compared to last year’s 3.5%.
SAMA’s report highlighted the non-oil sector maintaining a positive growth process.

The Saudi central bank has received three applications for banking licenses and is processing them is at an advanced stage, central bank governor Ahmed Al-Kholifey told a news conference on Wednesday.

He stressed that the liquidity levels is in a comfortable situation, noting that the institution is working to stabilize the exchange rate.

He explained that there is a study to create a digital currency for the purpose of buying products—however, noted that with the absence of a legal framework for the digital currency there may be risks and multiple consequences entailed.

He also pointed out that Saudi Arabia is currently conducting an evaluation process to obtain permanent membership in the Financial Action Task Force (FATF), saying that the institution carried out the evaluation process in cooperation with a number of other government departments, and will complete its evaluation in June 2018.

FATF is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.

The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

The FATF is, therefore, a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Another central bank official said no more bank mergers were expected.

Alawwal Bank and Saudi British Bank agreed in April to start talks on a possible merger.

Officials painted a highly positive picture of the economy, saying growth was likely to strengthen and they were not worried by deflation.

Kholifey said that in light of indicators in the first half of this year, he expected positive results for economic growth in the coming period.

Another central bank official said the bank was not worried about deflation because consumption was rising.

Officials also said they saw no reason for the riyal to fall in the forward foreign exchange market, that liquidity in the banking system was good, and that there was no concern about banks’ bad loans.