EFTA01379418

22 December 2017 EM Currency Handbook 2018: Still Fuel in the Tank Saudi Arabia The Saudi Arabian riyal (SAR) was introduced in 1961, replacing Saudi silver coins and foreign currencies. Until 1986 the currency displayed some flexibility with the SAR initially appreciating after the first oil price spike in the mid-1970s. The currency weakened steadily through the early 1980s until being pegged to the IMF's Special Drawing Rights (SDRs) in 1986. In practice, the SAR has been a de-facto peg to the USD at a rate of 3.75/USD. The peg to the USD was formalised in early 2003 to make official the GCC pegs to the USD in the run-up to the proposed GCC common currency. The Saudi Arabia Monetary Agency's (SAMA) primary functions are: • To deal with the banking affairs of the Government; • Minting and printing the national currency (the Saudi Riyal), strengthening the Saudi currency and stabilizing its external and internal value, in addition to strengthening the currency's cover; • Managing the Kingdom's foreign exchange reserves; • Managing the monetary policy for maintaining the stability of prices and exchange rate; • Promoting the growth of the financial system and ensuring its soundness; • Supervising commercial banks and exchange dealers; • Supervising cooperative insurance companies and the self-employment professions relating to the insurance activity; • Supervising finance companies; • Supervising credit information companies. The riyal is fully deliverable and convertible. It is backed by gold and other foreign currencies. The predominant cross is USD/SAR, but EUR and GBP crosses also trade regularly. Options are quoted on USD/SAR. USD/SAR exchange rate 3.1$ 314 1 112 1- 110 166 2008 2009 2010 1011 2012 2013 2011 2011 2016 2011 —USOISAA Son Dosack•Santabomligrpfteneet• J USD/SAR and SAR 3M implied yield 2.0 1.5 IA 06 00 t od 0:0 400 40 1 # 0 1 4, —mtAO/SAII 3m imaled !Mick ---`1A0/SAO .r Sa•n O.6c3•Aan Page 80 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0076883 CONFIDENTIAL SDNY_GM_00223067 EFTA01379418