(Bloomberg) --

Saudi Arabia appointed a new head of the central bank, promoting the vice governor for investment and research as the budget returns to a surplus for the first time in nearly a decade.

Ayman Alsayari replaced Fahad Al Mubarak, a former Morgan Stanley banker who will become an adviser to the Royal Court. In his previous role, Alsayari had been involved in local and international debt sales as the kingdom tapped bond markets for the first time.

He becomes governor as Saudi banks clamor for funding after a change in the way the government used its surplus last year. That was coupled with a rapid rise in lending that’s not been matched by deposit growth. 

SAMA, as the central bank is known, has been rapidly raising interest rates to match increases by the US Federal Reserve and protect Saudi Arabia’s currency peg to the dollar. The rate lenders charge one another for loans has since stabilized, though remains near a record high.

Alsayari joined the central bank in 1999. SAMA didn’t immediately respond to requests for comment or give a reason for the switch. 

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Al Mubarak was previously a minister of state and was the kingdom’s sherpa during its presidency of meetings of the Group of 20 industrialized economies in 2020. He also served as SAMA governor from 2011 to 2016, and was reappointed in January 2021. 

Al Mubarak joined as SAMA’s mandate shifted to include supporting economic growth as one of its prime objectives. It stepped in last year to ease the liquidity crunch in the local banking system.

SAMA was traditionally the kingdom’s main foreign investment vehicle, controlling about $440 billion in foreign assets that it uses to help defend the dollar peg. It has since been eclipsed by the Public Investment Fund, which was transformed under Crown Prince Mohammed bin Salman from a sleepy domestic holding company into one of the world’s biggest sovereign wealth funds with assets of over $600 billion.

(Updates with more on Alsayari from first paragraph.)

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