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Tue 28 Feb 2017 02:28 PM

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Saudi Arabia suspends domestic bond issue in February

Gulf kingdom refrains from issuing local currency bonds for a fifth month in a row

Saudi Arabia suspends domestic bond issue in February
Saudi money, Saudi currency, Saudi economy, Saudi finance, GCC currencies

Saudi Arabia's govermnent has decided to suspend its monthly issue of domestic bonds in February, refraining from issuing local currency bonds for a fifth month in a row, the Maaal financial news service has reported.

The suspension is possible because higher oil prices have improved government revenues and the government's $17.5 billion issue of international bonds last October was successful, Maaal quoted unnamed official sources as saying.

The halt to domestic bond issues has helped to ease a liquidity squeeze in the banking system that sent the three-month interbank offered rate soaring to an eight-year high of 2.386 percent in late October. The rate fell to 1.795 percent on Monday.

Finance minister Mohammed al-Jadaan told Reuters in late December that Riyadh expected to resume monthly domestic bond sales sometime in the first quarter of 2017.

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