According to the central department of statistics in Riyadh, annual inflation in Saudi Arabia has surged to 8.67% last month from 6.99% in January. The inflation in the economy is primarily caused by a peg to the ailing US Dollar.The repercussions from the dollar peg created an all time record of inflation rate in January, only to be exceed by the latest inflationary reports for February. At the moment the Saudi inflation rate is the highest in 25 years. Pressure on the Gulf countries to revalue their currencies against the US Dollar are mounting.The pressure to revalue has pushed the Qatari Central bank to raise the reserve requirement for banks by one percent. The decision has forced lenders to keep more money in the vaults preventing the falling interest rates from a further rise in inflation. This is in addition to the previous depository facility rate decrease. Earlier last week statments from Sheikh Abdullah bin Saud al-Thani, Qatari Central Bank Governor sparked a wave of speculators to enter into Qatari Riyal positions.
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