Introduction of Saudi Arab Currency and the US Dollar

        Saudi Arabia is the 27^th largest exporter country in the world. The top exports of the country are refined petroleum ($13B) and Crude petroleum ($96.1B). Oil and petroleum products are the main sources of trade. Researcher discussed almost all the trading factors in this report which can provide a vast insight into Saudi Economy (Simoes 2016). Saudi is the second largest petroleum exporter country. Saudi exports 260 billion barrels oil yearly which may be about the one-quarter of global oil reserves. When we talk about the comparison between US dollars and Saudi Riyal are 1$ is equal to 3.75 Saudi Riyal. So the prize of Dollar three times higher than Riyal (Tan, Jaganathan and Khasawaneh 2018).

Dramatically decreasing world oil price of Saudi Arab Currency and the US Dollar

        From the past some decades the prizes of oil used to be very high but from last five years, the prices the oil prizes go towards declining. In 2017the oil selling rate was $115 per barrel but in now it’s between $45 to $50 per barrel. There is a big collapse in oil prize so this situation becomes a big challenging situation for the Saudi economy and currency. There are many big factors which develop by this decline. As we know the 92 million barrel per day is the world demand for oil including Saudi Arabia. OPEC can supply almost 40% of this demand and Saudi is world’s second oil producer country and world first oil Exporter Company so the declining and decreasing in oil prizes directly affects on the Saudi economy and currency (Freeman 2018).

Currency value of Saudi Arab Currency and the US Dollar

        The falling of oil prizes is an adverse and worst impact for those countries whose economy and currency relies on oil trade or export. The declining and decreasing in oil prices directly effects on the economy of Saudi Arabia. The currency value, interest rate, inflation and Trade of Saudi also affected by low oil prices.

Inflation of Saudi Arab Currency and the US Dollar

        According to the author, the inflation is one of the biggest issues that occur by the oil prizing high. The sharp decline started in the August 14 and it badly affected on inflation in Saudi. The domestic economic conditions had been weekend. The oil prices and inflation have the cause and effect relationship. In Saudi, Arabia oil serves as a commodity it provides a major input to the Saudi economy. The oil prizes directly effect on trade prices and especially on food cost. Even in Saudi Arabia that considers a highly developed country the inflation becomes a very serious problem when oil prices go high (Spong 2018).

Interest rates of Saudi Arab Currency and the US Dollar

        By the declining oil prices interest rate in Saudi Arabia automatically go low. Decreasing interest rate effects automatically on the economy because it throws a negative impact on the economic perspective of the country. In 2013 when the oil prices were so low the interest rate was 2.00%, from 2014 to 2018 the rate was same as 2.00%. There was no actual effect of oil prize declining on an interest rate of Saudi (Focus Economics 2018).

References of Saudi Arab Currency and the US Dollar

Focus Economics . 2018. Interest Rate in Saudi Arabia. focus-economics.com. https://www.focus-economics.com/country-indicator/saudi-arabia/interest-rate.

Freeman, Chas W. 2018. "Saudi Arabia and the Oil Price Collapse Remarks to a Panel at the Center for the National Interest." Middle east policy council.

Leblanc, Mitchel. 2004. "Do High Oil Prices Presage Inflation? The Evidence from G-5 Countries." SSRN 25.

Lioudis, Nick K. 2018. "The Relationship Between Oil Prices & Inflation." Journal of Economics 56-98.

Simoes, Alexander. 2016. atlas. August 12. https://atlas.media.mit.edu/en/profile/country/sau/.

Spong, Rebecca. 2018. Saudi Arabia's inflation quickens on rising food costs. London: Arab News.