Saudi Arabia and UAE see little Brexit impact on their banks

Two Gulf states said on Saturday they did not anticipate their financial institutions to be greatly affected as a result of Britain’s vote to exit the European Union.

Saudi Arabia, the world’s largest oil exporter and OPEC heavyweight, said it had already made some adjustments to assets denominated in sterling and euros in anticipation of the vote.

The Kingdom had been monitoring the situation and made the changes as a “precautionary stance,” Saudi Arabian Monetary Authority Governor Ahmed al-Kholifey was quoted as saying by state news agency SPA.

“For the banking sector, we expect that the impact will be limited, because it is less exposed to the two aforementioned currencies’ movements,” he said.

Saudi Arabia’s foreign assets are mainly denominated in US dollars, in the form of securities such as US Treasury bonds and deposits with banks abroad.

Neighboring United Arab Emirates also said on Saturday any effect on its financial institutions as a result of Britain’s EU exit would be limited.

“Due to the limited interconnectedness between the UAE and UK financial systems, there are only few channels through which uncertainty about future UK and EU relations could affect the UAE financial institutions,” the country’s central bank said in a statement, asserting it would continue to monitor developments.