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Saudi Central Bank pumps SAR 50B into local banks

Saudi Central Bank pumps SAR 50B into local banks

ArabFinance: The Saudi Central Bank has deposited SAR 50 billion in commercial banks, Bloomberg reported on June 27th, citing informed sources.

The package included funding provided to banks at a discount to the three-month Saudi Interbank Offered Rate (Saibor).

The central bank aims to take precautions ahead of an anticipated interest rate hike by the Federal Reserve System of the United States, sources said.

The reported funding was deposited in three tranches the first two of which totalled SAR 15 billion, they added.

“The Saudi central bank’s fresh injection of cheap money and 13-week repos will improve funding costs. Banks still must diversify funding and gather SAR 160 billion to pay for 14% credit growth, as the central bank’s aid just delays a fix,” Senior Analyst at Bloomberg Intelligence Edmond Christou commented.

The Saudi Central Bank increased the rate of repo agreements and reverse repurchase agreements (RRP) by 0.5% to 2.25% and 1.75%, respectively.

The Federal Reserve raised interest rates by 0.75%, marking the largest increase since 1994.



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