DUBAI/RIYADH — Ahmed Al-Kholifey, governor of the Saudi Arabian Monetary Authority (SAMA), has said he was confident in Saudi Arabia's financial stability and reiterated that the Kingdom was committed to keeping the riyal pegged to the US dollar.

But the outlook for the economy remains uncertain, he said on Wednesday, as the oil exporter navigates the effects of low oil prices and the coronavirus pandemic. Al-Kholifey was speaking to a virtual Euromoney event.

“For us, in our situation, the cut in oil production and the impact of the virus, they have impacted the growth projections,” he said. “The outlook for 2020 remains uncertain.”

The International Monetary Fund has estimated the Saudi economy could contract by 6.8% this year. Saudi officials have previously said their own projections were less “pessimistic” than that.

Al-Kholifey said the Saudi fixed exchange rate was one of the “overriding anchors” of stability of the financial sector in Saudi Arabia, but added caution was needed in the light of the economic stimulus that has been provided to the economy.

The Saudi central bank in March launched a SR50 billion ($13.33 billion) package to support the private sector. In June, it announced the injection of SR50 billion into the banking sector to support liquidity.

“One has to be careful when you unplug that life support, what would happen, particularly for the quality of assets,” he said.

“We feel comfortable but, again, we cannot really relax as long as we are in the midst of the crisis.” — Agencies