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PhD student Fahad Alhumaidah published in RBS Reserve Management Trends 2013

Fahad Alhumaidah's research has been featured in the Central Banking Publications’ (CBP) annual book titledRBS Reserve Management Trends 2013. Published in spring each year, the book presents survey results of around 60 participating central banks, responsible for more than $6.7 trillion in reserve assets, on their views of the global financial markets and the key issues facing the international monetary system. Aside from the survey results, the book also features other chapters relevant to the subject of central bank reserve management contributed by various authors.

The research of Mr. Alhumaidah was included in the book as a separate chapter titled Reserve Adequacy in Asset-Liability Framework. The chapter seeks to determine central banks’ obligations in order to align assets against their liabilities, for which reserve adequacy measures have traditionally been used. Focusing on countries operating pegged exchange rate regimes and taking the example of Saudi Arabia, Mr. Alhumaidah presents an alternative asset-liability framework using the country’s balance of payments and the balance sheet of the central bank to identify liabilities that it may wish to provision for. Such provisions are classified as transaction-related vis-à-vis precaution-related reserves which may both represent the liquidity portfolio of the central bank. "Having sufficiently provisioned for liquidity requirements," Mr. Alhumaidah notes, "any excess reserves left could be considered as an investment portfolio for which an asset-liability management (ALM) optimisation model could be built".

Mr. Alhumaidah is currently a PhD candidate at the ICMA Centre, under the joint supervision of Professor Charles Sutcliffe, Professor Simon Archer and Dr Alexander Mihailov. Prior to conducting his PhD, Fahad headed the Fixed Income Team of the External Portfolio Group in the Investment Department at the Saudi Arabian Monetary Agency (SAMA). His research interests include sovereign and central bank ALM, country risk management, and sovereign balance sheet management for commodity-based countries.

Published 8 May 2013

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