A number of pundits believe that the Saudi market will be slightly impacted by China’s devaluation of its currency.
They said they expect the prices of Saudi imports from China will go down by ten to 20 per cent as a result of the devaluation, Al-Eqtisadiah reports.
However, they said that the impact will be limited in the coming period, given the fact that the dollar continues to rise. They explained that local importers in Saudi Arabia are the ones who will ultimately determine how much imported goods should decline.
They added that the drop in the Yuan’s value doesn’t affect the products consumers buy from the market, but direct importers are the ones who benefit from the currency devaluation.
Saudi economist, Abdulrahman al-Sultan, said Saudi Arabia is a top trading partner of China and that the devaluation of the Chinese currency will push the cost of imports from the giant Asian nation down.
Speaking on the oil trade between Saudi Arabia and China, Al-Sultan said the kingdom’s oil exports to China will not be significantly affected but the slowdown in China’s economic growth will, certainly, leave an impact on its demand for oil.