TEHRAN, October 15 -The economic backlash for the Saudis over the disappearance of dissident journalist Jamal Khashoggi found new dimensions as the kingdom’s currency fell to its lowest level in two years in Monday's trading.
TEHRAN, Young Journalists Club (YJC) -The riyal was quoted by media to have reached 3.7524 to the US dollar in the spot market in early trading, its weakest rate since September 2016.
In the forwards market, the dollar rose as high as 100 points against the riyal, a nine-month high, from 54 points on Friday. In 2016, it briefly rose above 1,000 points.
Saudi Arabia’s international bond prices also slipped over fears that foreign investment inflows could shrink as Riyadh faces pressure over Khashoggi’s disappearance.
Trade in the forward currency market, used by banks to hedge investments, also suggested some institutions were protecting themselves against the risk of capital outflows or US sanctions on Riyadh over the journalist’s case.
The Saudi stock market had tumbled 7.2 percent over the previous two trading days because of the Khashoggi case, but it rebounded 2.0 percent on Monday.
Traders said some institutional investors, including foreign ones, were buying stocks at the lows, believing Saudi Arabia's fundamental economic situation was unlikely to change much, Reuters reported.
However, many bankers and analysts said the Khashoggi case had fueled perceptions of political risk in Saudi Arabia because it was the latest in a series of unexpected incidents over the past three years.
During this period Saudi Arabia has launched a war in Yemen, imposed an embargo on Qatar, arrested dozens of top officials and businessmen in a corruption purge, detained women's rights activists and seen tensions with Canada and Germany rise.
These, as experts were quoted by media, already showed that political developments in Saudi Arabia were becoming an increasingly important economic risk.
Source: Press TV
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