US dollar, tough rules hit money exchange business

It's All about money

Money changers say their daily business has dropped to between SR100,000 and SR300,000 at the exchange establishments close to the Grand Mosque because most pilgrims come to Makkah with US dollars

There is a high demand for dollar because of its stability against riyal, the dealers have been quoted as saying by a local publication.

The dealers said that they stand to gain more by exchanging currencies of other countries against the Saudi riyal.

The anti-money laundering regulations imposed by the Saudi Arabian Monetary Agency (SAMA) on the entry and exit of money have also reportedly affected the business of foreign exchange dealers. One such regulation is the mandatory registration of transactions above SR50,000 for recording the source of cash.

The Libyan and Tunisian dinars are nearly unwanted in the market while no trading takes place for the Algerian dinar. The Umrah pilgirms from Algeria instead carry euro, which the money changers are collecting hoping for its rise in value.

A dealer, Sarraf Raed Abbas, said SAMA has imposed new rules to regulate the work of money changers such as keeping bills and purchases and keeping records for customers to prevent money laundering. According to the rules, they are also required to record the source of money, place of buying and and fix the hours to send money to banks.

The new regulations also aim to improve the money exchange pattern and, with this purpose, booklets have been distributed among traders. Customers are required to have membership cards so that to speed up the operations.

He said the money changing market has been dull during the current month of Shaaban, which is seeing a reduced number of pilgrims and also fewer varieties of currencies.

The current recession has hit the money exchange business hard, Abbas said, adding that purchases reached SR5,000 to SR1 million a day.

He said fewer deals were made in Turkish lira, followed by Indian rupee, Pakistan rupee and Moroccan dirhams. The Tunisian dinar is exchanged at a rate of 56 dinars for SR100 which was 50 dinars for SR100 a month ago.

Abbas said euro is also falling as is traded at 100 euros against SR410 while it was earlier SR418.

Abbas added that the exchange of the Libyan dinar was stopped because its exchange rate fell from SR26 to SR17 for 10 dinars. The Algerian currency is almost out because 100 dinars fetch SR20 only. “The market is literally dead, except for the movement of Gulf currencies and euro, besides the month of Shaaban was disappointing,” he added.


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