What are its main products, services or commodities what are its main exports and imports and who are its main trading partners how is the international value of the currency determined - Essay Example

Saudi Arabia and trade al affiliation Saudi Arabia and trade Saudi Arabia was an agricultural economy occupied by nomads until early 1930s when the government experienced rapid growth in oil industry that made it shift to oil production, and its products. Much of this natural economy lost its value to the national oil economy. As a manufacturing industry, Saudi Arabia manufactures products such as machinery textiles materials tea and steel metals. The country also takes part in oil recycling, oil purification, engine treatment, bronze, gate valves, alloy, wheel, gate valve, bronze engine oil, oil remedy, vehicle oil, oil facilitation.

Apart from the above, Saudi Arabia also manufactures alloys, wheels, as well as, transfers oil and seats (Kate, 2004). The main exports in Saudi Arabia are crude oil, refined crude oil, petroleum products, plastic products and other comedies manufactured as a result of petroleum products. Therefore, the main export in Saudi Arabia is petroleum and petroleum products. The main imports are outfits and textiles, as well as offer transportation services and equipments and lastly, processed products.

The main trading partners with Saudi Arabia in 2010 for both import and export include the following countries; Japan, china, South Korea, India, and Singapore. For imports they are; China, Singapore, Japan, Korea, India, South Korea and France. Other partners are Oceania Australia, South America, Western Europe Eastern, Europe and North America (Kate, 2004). The Saudi Arabia currency is denoted by ISO which is further divided into 100 hallalah, and there exists a coin in hallalah that is mostly used in Saudi Arabia.

The Riyal has been fixed against the United States dollar. Money transfers are not only considered in determining value currency. Paul (2007) indicates that other factors such as customers’ feedback speed of sales, company’s experience and thus the factors that have higher value are used to determine the currency value. Currencies just like any other goods with the aim of selling or buying, are influenced by the laws of supply and demand. For instance, when people want a certain currency, then the currency value escalates just like other commodities, and when few people want the currency the value goes down.

The major factor that influences currency value is trade and investment, where one buys a commodity in a different currency, then converts the currency into their current national currency (Kostiner, 2003). The change in this currency level can influence the value of currency due to the demand and supply of a given currency. Making profits through trade can also be used to determine the value of currency, where traders buy and sell currencies just the way buyers sell and trade stocks in market exchange.

In response, Heptulla (2001) indicates that, the higher the demand, the higher the sales; thus, an increase in the value in currency. Analysts also conduct an analysis of currency, just like the stock analysis is conducted. This happens when investors decide to invest, monitor the economic value of a given currency, and consequently, leading to an increase in currency level. The country’s political stability, employment rates, and interest rates also determine the currency level of Saudi Arabia.

Currency traders check all of these basics and develop an impression of the economic status, so that they can recognize the currency value. Lastly, the socio- economic features that are likely to affect the economy are political instability, war, and corruption within the government. The high rate of unemployment and dependency on petroleum products might affect the country’s economy. References Heptulla, Q. (2001) Petroleum in Saudi Arabia. New York: Allied Publishers. Kate, K. (2004) Oil industries Dependency in Saudi Arabia.

New York: Metropolitan. Kostiner, W. (2003) The production of Saudi Arabia, From Agricultural to Petroleum State. Oxford: Oxford University Press. Paul, M. (2007) Saudi Arabia- The Heartland of petroleum industry. New York: Taza Press.