King Salman has approved the Saudi Central Bank Law on Tuesday during a Cabinet session.
The new law includes changing the name of the Saudi Arabian Monetary Authority (SAMA) to the Saudi Central Bank; with direct reporting to the King. The Saudi Central Bank will continue to enjoy financial and administrative independence.
This approach comes in line with international best practices for central banks. The law also stipulates that the Saudi Central Bank shall replace SAMA in all its rights and obligations.
The new law identifies the objectives of the Saudi Central Bank as follows, Maintaining monetary stability; Promoting the stability of, and enhancing confidence in, the financial sector and Supporting economic growth.
In addition, the law confirms that the Saudi Central Bank is responsible for setting the monetary policy. Besides, choosing its instruments and procedures.
It explains the relationship of the Saudi Central Bank with the government as well as relevant international entities. Moreover, it updates the governance framework of the Saudi Central Bank’s operations and decisions.
According to the new law, the Saudi Central Bank will continue to use the acronym “SAMA”. This is due to its historic significance and relevance locally and globally.
The banknotes and coins of all denominations bearing the name of SAMA will remain in circulation. Besides, keeping their status as legal tender.
On this occasion, the Governor of the Saudi Central Bank Dr. Ahmed A. Al-Kholifey has extended his thanks and appreciation to King Salman; and the Crown Prince Muhammad Bin Salman, deputy premier and minister of defense, for approving the Saudi Central Bank Law.
Dr. Al-Kholifey has added that the approval reflects the wise leadership’s pursuit of development, keeping up with international best practices, and serving the public interest since the establishment of the Saudi Arabian Monetary Authority in 1371H (1952).
Against this background, SAMA has been able to carry out its responsibilities in managing monetary policy and reserves and supervising the financial sector’s institutions (including banks, finance companies and insurance companies), the credit information sector, and the financial technology (Fintech) sector.
Through performing its functions, and responsibilities, SAMA has been able to maintain the monetary and financial stability and to support economic growth in the Kingdom of Saudi Arabia.
Dr. Al-Kholifey has indicated that SAMA studied closely international best practices in the area of central bank laws as well as relevant recommendations.
Such practices and recommendations were tested to ensure their compatibility with the local environment and the Saudi economy. The Saudi Central Bank Law came as a result of the project of updating the Charter of the Saudi Arabian Monetary Authority.
The new law enhances the role of the Saudi Central Bank, meets today’s requirements, keeps pace with the rapid global economic and financial development, and is in line with the Saudi Vision 2030 that aims to make the Kingdom of Saudi Arabia an exemplary and leading nation in all aspects.