Saudi Arabia is looking forward to take extra measures against Canada beyond reports it plans to unload its holdings of Canadian stocks and bonds as a debate over women’s rights activists intensifies.
Adel Al-Jubeir, Foreign Minister, talking at a news conference in Riyadh, stated that there was no requirement for mediation in the dispute.
He told, “Canada knows what it needs to do.”
The Canadian currency reduced as much as 0.5 percent to C$1.3120 per US dollar after the Financial Times announced that the state pension funds and Saudi Arabia central bank have ordered their overseas asset managers to eject of Canadian assets starting Tuesday.
Saudi Arabia prevented diplomatic bonds and stopped latest trade dealings late Sunday following comments by Canadian Foreign Minister Chrystia Freeland condemned the kingdom for arrests of women’s rights activists. The kingdom has since escalated its moves against Canada, halting flights to Toronto and commanding the return of thousands of students who are studying at Canadian schools.
Saudi’s asset sales may not have a great impact on the Canadian currency, even though seasonally thin trading in August could worsen that effect.
As per estimates from the Canadian Imperial Bank of Commerce, Saudi holdings of Canadian dollar reserves are between C$10 billion ($7.7 billion) and C$25 billion, with the upper end of that approximation representing 10 percent of daily Canadian dollar volumes.
North American head of foreign exchange strategy at CIBC, Bipan Rai stated, “That’s enough to leave a mark on the loonie in August when volumes are typically lighter.” Still, Rai stated that the effect on the currency should be “ephemeral” as bilateral trade between Canada and Saudi Arabia is small.
As per the Statistics Canada data, so far this year, Canada has transported C$1.4 billion in merchandise goods to Saudi Arabia and imported C$2 billion.
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