| For Saudi Arabia and oil-producing countries in the Gulf of Arabia, having a dollar-pegged economy is a struggle as crude prices tumble and domestic deficits build. As the U.S. Federal Reserve raised its benchmark interest rate Wednesday, the official daily oil price benchmark for the Organization of the Petroleum Exporting Countries (OPEC) fell to a new 11 year low of $32.33 per barrel.
Low oil prices are hurting the Saudi Arabian economy. “This is the highest this key funding rate has been since January 2009 and 60 bp above the level in place in mid July when the OPEC oil benchmark was still above $40. The Saudi Arabian benchmark is now 83.9 basis points above the US equivalent, an unusual state of affairs for a pegged currency..............................................Full Article: Source
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