possible source of easing of domestic liquidity would still be consistent with Article 6 Saudi Arabia’s Currency Law which imposes a 100% currency backing by Fx reserves, such that that currency issued cannot exceed foreign reserve assets. The full cover requirement would still be in force as reserve money currently represents just 14% of foreign reserve assets, down from c100% throughout the period 1996-2000.
30 GEMs Paper #26 | 30 June 2016 3S Merrill Lynch
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