1. ROYAL DECREE ISSUED AFTERNOON OF AUGUST 11 SETTING NEW
RATE FOR RIYAL IN TERMS OF GOLD EFFECTIVELY REVALUING BY
5.078 PERCENT (RPT 5.078 PERCENT) A SURPRISINGLY MODEST
CHANGE.
2. EXACT NEW RATES ARE AS FOLLOWS: SAMA RATE FOR BUYING
DOLLARS IS 3.545 RIYALS AND SELLING RATE SET AT 3.555. OFFICIAL VALUE OF RIYAL IS 28.16 CENTS (RPT 28.16 CENTS).
ONE HUNDRED RIYALS AT THE OLD RATE WOULD BE WORTH
95.1675 AT NEW RATE.
3. LOCAL NEWS MEDIA EMPHASIZED THE NECESSITY OF RE-
VALUATION TO PREVENT FURTHER GREAT HARM TO THE RIYAL
ECONOMY FOLLOWING THE DOUBLE DOLLAR DEVALUATIONS. EDI-
TORIAL IN NADWA AUGUST 12 NOTED NEW RATE GIVEN ONLY IN
TERMS OF GOLD AND SAID THAT THIS MADE CLEAR RIYAL WAS NO
LONGER CONNECTED WITH DOLLAR CURRENCY AND IS A TRUE
NATIONAL AND INDEPENDENT CURRENCY. AN AL MEDINA GUEST
EDITOR ALSO NOTED RIYAL WAS NO LONGER DIRECTLY CONNECTED
WITH AND WAS FAR REMOVED FROM THE DOLLAR EXCHANGE MARKETS.
THERE IS HOPE, HE WROTE, THAT THE RIYAL ITSELF MIGHT NOW
BE STRONG ENOUGH TO BE ACCEPTED BY OTHER COUNTRIES TO
FINANCE SAUDI IMPORTS.
4. LOCAL SOURCES AGREE GOVERNOR ALI OF SAUDI MONETARY
AGENCY (SAMA) HAD ARGUED AGAINST ADJUSTMENT AT THIS TIME
ON BASIS THAT IT WAS COUNTERPRODUCTIVE TO KINGDOM'S BASIC
POLICY OF SEEKING TO INDUSTRIALIZE. BY CHEAPENING IMPORTS
AND MAKING POTENTIAL EXPORTS MORE EXPENSIVE, HE REPORTEDLY
CONTENDED SAG NOT FOLLOWING CONSISTENT MONETARY AND IN-
DUSTRIALIZATION POLICIES. MODEST RATE CHANGE APPEARS TO
BE A COMPROMISE WITH OTHER BOTH WITHIN AND OUTSIDE GOVERN-
MENT.
5. LOCAL BANKING FIGURES VIEW REVALUATION AS POTENTIALLY
DISAPPOINTING IN PURELY MONETARY TERMS OF RESTORING
CONFIDENCE IN DOLLAR-RIYAL EXCHANGE MOVEMENTS. BUSINESS-
MEN FEEL MINIMAL REVALUATION MORE PSYCHOLOGICAL THAN
ECONOMIC IN ITS IMPORTANCE.
THACHER
Source: https://www.wikileaks.org/plusd/cables/1973JIDDA03428_b.html
Summary: Timeline overview
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