Saudi Arabia's King Abdullah has ordered subsidies on imported rice and baby milk to cushion consumers from rising inflation, Saudi media reported on Sunday. The royal decree, published in newspapers, said the government would pay a subsidy of 1,000 riyals ($267) per tonne of imported rice and increase the subsidy on baby milk to 12 riyals per kilogramme from 2 riyals.
"This is based on the importance of these two commodities in citizen's living costs," the official statement said. It quoted Finance Minister Ibrahim al-Assaf as saying a ministerial committee would oversee implementation of the decree.
Assaf has been attacked in Internet forums for ruling out a change in the country's dollar peg, which forces the central bank to track US monetary policy at a time when the US Federal Reserve is cutting interest rates and inflation is surging at home.
Saudi inflation climbed to 4.89 percent, its highest in at least a decade, in September, raising pressure on the world's biggest oil exporter to heed growing discontent over prices.
Saudis in anonymous Internet forums say they suspect the US-allied government, which has resisted calls from other Gulf Arab countries to change currency policy, is wedded to the dollar peg for political reasons.
Markets have taken talk of currency reform in the Gulf as a sign the region's state investors, controlling $1.2 trillion in reserves, would be more reluctant to buy US assets.
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