Saudi Arabia has suspended the use of 7-day, 28-day and 90-day repurchase agreements that were rolled out two years ago when the kingdom faced a liquidity crunch, the central bank said.
The decision was made “due to a lack of need for them in light of current developments,” and to “strengthen monetary stability,” the Saudi Arabian Monetary Authority said in a statement on its website Monday, without providing further details. That leaves only the one-day repurchase agreement.
The world’s largest oil exporter introduced 7-day and 28-day repurchase agreements in September 2016 as tight liquidity in the banking system threatened to add to the economic strain of lower crude prices.
The 90-day pacts were introduced a month later. The rise in oil prices since then has boosted government finances and helped private-sector confidence, while officials have said that there is no longer concern about liquidity.
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