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SAMA has been playing a crucial
role in the consolidation and development of the Saudi financial system
. At the time of its establishment, the Kingdom did not have a monetary
system exclusively of its own. Foreign currencies circulated in the
Kingdom as a medium of exchange, along with Saudi silver coins. Saudi
bank notes had not yet been issued. There was no Saudi bank in existence
and the banking business was being conducted by foreign bank branches.
One of the foremost tasks of SAMA in its early stage was, therefore, the
development of a Saudi currency. SAMA also paid special attention to the
need for promoting the growth of a national banking system. From 1960 to
1972, SAMA focused on banking regulations against the background of
expanding banking business and the Kingdom’s acceptance of full
convertibility of the Riyal in March 1961 in accordance with the Article
VIII of the Articles of Agreements of the IMF. From 1973 to 1982, SAMA’s
preoccupation was to contain inflationary pressures in the booming
economy, expansion of the banking system and manage the massive foreign
exchange reserves. From mid 1980s, SAMA’s priorities have been to
introduce financial market reforms. Over the years, with the growth of
the economy and expansion of the financial system, SAMA’s
responsibilities have increased several folds.
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