By Staff writer
Saudi Arabian Monetary Agency said to have offered short-term loans in late June
Banks in Saudi Arabia were reportedly offered around SR15 billion ($4 billion) in short-term loans from the central bank to ease lending constraints.
The Saudi Arabian Monetary Agency (SAMA) offered individual banks loans of up to SR1.5 billion in late June, sources told Bloomberg.
The loans were offered at a discounted rate based on the banks’ balance sheets, it reported.
They were for a one-year term and were intended to help boost banks’ ability to lend.
SAMA has already taken steps to alleviate liquidity constraints, including allowing banks to lend the equivalent of 90 percent of their deposits, up from 85 percent, Bloomberg reported. It said SAMA declined to comment.
One bank said it expected further measures from SAMA to ease liquidity pressures as the kingdom seeks to plug a budget deficit as a result of persistently low oil prices.
Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC, was quoted as saying: “We expect to see further measures, such as possibly reducing the reserve requirement ratio or increasing the loan-to-deposit ceiling in the coming days.”