Lagarde Praises Saudi Role in Stabilising Economy

International Monetary Fund managing director Christine Lagarde praised Saudi Arabia's role in stabilising the global economy during a visit to Riyadh on Saturday, but there was no word on the possibility of a fresh Saudi contribution to the IMF's resources.

In a statement at the end of her trip, Lagarde expressed "the IMF's appreciation for Saudi Arabia's important role in supporting the global economy, including its commitment to stabilise the oil market and its active participation in both international financial institutions, such as the IMF, and global economic policy discussions in the context of the G20."

But she did not say whether her talks with Saudi King Abdullah, finance minister Ibrahim Alassaf and central bank governor Fahad al-Mubarak had dealt directly with the issue of aid. Officials at the Saudi finance ministry were not available to comment. The IMF is seeking to more than double its war chest by raising $600 billion in new resources to help countries deal with the fallout of Europe's sovereign debt crisis. Wealthy oil exporters in the Gulf, as well as big emerging economies such as China, may be asked to contribute much of the increase.

But some countries are reluctant to stump up money until Europe does more to fight the crisis, and until they obtain more influence in global economic bodies such as the IMF.

In a speech last week, former Saudi intelligence chief Prince Turki al-Faisal, who no longer holds government office but is still seen as influential, said big emerging economies such as China, India and Saudi Arabia would not aid the West unless they were given more say in running the global economy.

Lagarde said in her statement that the Saudi economy had performed well during the global financial crisis, thanks to strong policies and prudent supervision of the financial sector. She said she had discussed the next steps in deepening Saudi financial markets to provide more support for growth. The government is considering whether to open the stock market to direct foreign investment, and many market participants expect it to do so this year.