(1888PressRelease)
September 28, 2007 - The Saudi riyal fell slightly earlier today to 3.7365 against the dollar, having previously hit a 20-year high.
An interest rate decision is set to be announced by the Saudi central bank in Riyadh at 1:30pm - which Bloomberg says caused the 0.03 per cent drop.
The decision on whether the riyal will continue to be pegged to the US dollar is also set to be announced by the Saudi Arabian Monetary Authority (SAMA).
Last week, the SAMA said that it would not follow the decision of the US Federal Reserve in cutting interest rates, which led to analysts saying that the riyal would soon be unpegged and revalued.
In an emailed note circulated earlier today, Standard Chartered speculated that "if the Saudi government chooses not to cut interest rates, markets are assuming that they may have to revalue".
"Markets believe that something has to give and are reacting to the silence of SAMA," the bank added.
Fed chief Ben Bernanke's 0.5 per cent rate cut came as a response to the credit crunch - which has since spread to the global markets - caused by the subprime mortgage crisis in the US.
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