This book sheds new light on the critical importance of the Saudi Arabian Monetary Agency
(SAMA) a remarkably successful central bank that is a model for developing oil exporters
worldwide. As a swing producer Saudi Arabia has traditionally stepped in to make up for oil
supply shortfalls in other OPEC countries or to scale back their own production when
overabundance might lead to a price crash. Since 2014 Saudi Arabia has changed its policy in
response to the rise of American shale oil in search of a long-term strategy that will once
again help balance supply and demand at a steady price. In its informal dual role of central
bank and sovereign wealth fund SAMA must navigate the paradoxes faced by monoline oil
producing countries: the need for diversification vs. dependence on oil-based revenue the loss
of foreign exchange reserves that follows oil-financed government spending the unreliability
of revenue from oil the challenges of using a Western model for supervising Shariah-compliant
banks and the need to have a balancing mix of oil and financial assets. As SAMA (now the Saudi
Arabian Monetary Authority) reassesses its role in 2017 this history and guide to current
policy issues will prove invaluable for policymakers in oil producing economies looking to
apply lessons from the past as they plan for the future.
