Saudi Gazette report JEDDAH — The Kingdom's currency exchange market is expected to witness a 50 percent growth during the upcoming Haj season, economic experts said. Speaking to Al-Watan daily, they said the high demand and increased liquidity during the season creates a boom for the Saudi currency. The Saudi Arabian Monetary Agency (SAMA), the Kingdom's central bank, governs the currency exchange market. The agency supervises the process of issuing permits to start a currency exchange shops and strictly monitors the trade. Professor of Economics at the University of Taif Salem Baajaja estimated the size of the Saudi currency market at SR35 billion. Baajaja said the size of daily transactions during the Haj season could reach SR2 billion, giving a 50 percent boost to the market compared to the rest of the year. Lucrative Member of the Saudi Economic Association Abdullah Al-Maghlouth said Haj and Umrah are two important factors that boost the Saudi currency market. He noted that expatriates working in the Kingdom also contribute to providing liquidity for currency traders through the exchange of cash, selling, buying and transfers. Al-Maghlouth estimated the size of annual currency exchange market, including Haj and Umrah seasons, at more than SR30 billion. He said the market is highly lucrative with currency traders earning around SR500 million annually. 50 currencies The currency exchanges in Makkah are among the most active worldwide due to the number of pilgrims who come from all over the world to perform Haj or Umrah, according to a source from the banking sector. The city has 11 licensed exchanges and each of them is required to have a financial capital of SR1 million according to SAMA regulations. Money exchangers deal with approximately 50 foreign currencies with the US dollar and the euro topping the list of the most exchanged bills, followed by currencies of Muslim and Arabic countries. Makkah and Madinah are the most active cities for currency exchange. SAMA had issued new licenses based on the increasing demand for cash exchange and traveler's checks. The Saudi central bank recently allowed the opening of more currency exchange shops at the country's ports of entry yet enforced strict sanctions on those who trade in currency without an official license. Pilgrims who visit the holy cities bring specific amounts of money that they spend inside the Kingdom, while some Haj service providers commit to fulfilling pilgrims' foreign exchange requirements. SAMA has imposed strict regulations on the entry and exit of money from the country in its efforts to combat money laundering. One regulation requires the mandatory registration of all transactions above SR50,000. The rules regulating the work of money changers oblige them to keep records of customers, the source of money and the place of purchase.
