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.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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