Saudi Arabian Monetary Authority
| Headquarters | Riyadh, Saudi Arabia |
|---|---|
| Established | 4 October 1952 |
| Governor | Ahmed Abdulkarim Alkholifey |
| Central bank of | Saudi Arabia |
| Currency |
Saudi riyal SAR (ISO 4217) |
| Website | www.sama.gov.sa |
The Saudi Arabian Monetary Authority (SAMA), established in 1952, is the central bank of the Kingdom of Saudi Arabia. Previously, it was known as Saudi Arabian Monetary Agency.
Prior to the establishment of the Saudi Monetary Authority, the Saudi Hollandi Bank, a branch of the Netherlands Trading Society from 1926 acted as a de facto central bank. It kept the Kingdom's gold reserves and received oil revenues on behalf of the Saudi Arabian government. In 1928 it assisted in the establishment of a new Saudi silver coin, commissioned by King Abdulaziz which became the Kingdom's first independent currency. The Saudi Hollandia Bank handed over its responsibilities to the SAMA when it was established in 1952 and became a model for other foreign banks in the kingdom.
Abdallah Sulaiman was a Najdi of humble background who worked his way up from clerk to the first Saudi minister of finance and close confidant of King Abdulaziz. Sulaiman surprisingly involved in probably the most significant attempt at administrative rationalization in the 1950s: the creation of the Saudi Arabian Monetary Authority (SAMA); it was known as Saudi Arabian Monetary Agency.
In the early 1950s monetary chaos reigned in Saudi Arabia. Interested in at least minimal economic stability, the U.S. embassy and Aramco successfully lobbied the king to accept U.S. consultants into the kingdom. U.S. adviser Arthur Young managed to convince Sulaiman and the king of the need for basic monetary and banking regulation. Young was mandated by the king to draw up a charter for what was to become SAMA within a few hours. SAMA derived its income by charging the government for its services. Its first head was also an American, and accountants were hired from Lebanon. King Abdulaziz and Sulaiman had been convinced of the existential need for institution building in this strategic sector. SAMA’s charter and use of expatriate technocrats bolstered the relative independence of the body. After the Ministry of Finance temporarily sidelined SAMA, in 1957 the governorship was taken over by another expatriate, Pakistani Anwar Ali, who had come to the country with an International Monetary Fund mission and who held the post as a confidant of King Faisal until his death, in 1974. Different from other "fiefdom ministries," SAMA’s well-paid leadership used relative autonomy and Abdulaziz’s and Faisal’s clear reform mandates to become one of the best central banks in the Middle East.
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