Saudi Arabia’s Currency and the U.S. Dollar (110 Points)

While Saudi Arabia seeks to diversify its economy, the Saudi economy is dominated by the petroleum sector. In addition, the Saudi Arabian Riyal (SAR) is pegged to the U.S. Dollar.

In a critical essay, indicate the main considerations Saudi Arabia faces from a currency perspective (e.g., currency values, interest rates, inflation, and trade issues) that ensue given two scenarios:

  • The first scenario is a dramatically declining world oil price.
  • The second scenario is a dramatically increasing world oil price.

Analyze the results you expect from each scenario.

Directions:

  • Your essay is required to be four to five pages in length, which does not include the title page and reference pages, which are never a part of the content minimum requirements.
  • Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital Library to find your resources.
  • Use Saudi Electronic University academic writing standards and follow APA style guidelines.

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