Foreign assets controlled by the Saudi Arabian Monetary Agency declined 2.8per cent, or about $11 billion, in March from a month earlier. The decline has accelerated from a 2per cent drop in February. Since November 2008, when the global economic got hold, oil rich Saudi Arabia has shed more than $31 billion in foreign assets.
Although Sama’s foreign assets rose by about 19 per cent in March from their level a year earlier, they were at their lowest level since July, 2008. The global financial crisis has battered global markets and oil prices have fallen around $100 from a record high near $150 in July last year, hitting both the revenues and the foreign holdings of the oil exporters too.
The boom in oil prices since 2002 has filled the kingdom’s coffers and made it one of the largest holders of US Treasury and other securities. But as the global economic downturn cramps its development plans and strains its financial system, the government has increased its support of the local economy, putting a strain on public finances.
Saudi Arabia injected SR31.4 billion in the fourth quarter of 2008 to support its financial system through a variety of measures including direct deposits into local banks.
The central bank also arranged deposits of SR17.9 billion by government-owned entities, which helped lower the local banks’ loan-to-deposit ratios and freed up lenders to extend credit to consumers and businesses in the kingdom.
Liquidity conditions have eased in Saudi Arabia this year, with the broadest measure of money supply growth inching up slightly to 15.8per cent in March. Saudi Arabia’s domestic liquidity has crossed SR1 trillion-mark, the Saudi Arabian Monetary Agency said in an earlier announcement.
Sama cut its reverse repo rate by 25 basis points to 0.5 per cent in mid-April, saying then the move was designed to realign the reverse repo with short-dated market rates, which have fallen to historic lows as liquidity conditions have improved and the need for interbank lending has diminished. According to Samba Financial Group’s Economic Monitor for April, banks’ non-statutory deposits with SAMA have risen sharply since the intensification of the global financial crisis in the third quarter of last year, reaching SR74 billion by end-February, up from virtually nothing in October 2008.
Simultaneously, banks have also reined in lending to the private sector: Year-on-year growth in lending remains strong, at around 17 per cent, but it has slowed sharply over the past six months, while month-to-month values have fallen.
Although Sama’s foreign assets rose by about 19 per cent in March from their level a year earlier, they were at their lowest level since July, 2008. The global financial crisis has battered global markets and oil prices have fallen around $100 from a record high near $150 in July last year, hitting both the revenues and the foreign holdings of the oil exporters too.
The boom in oil prices since 2002 has filled the kingdom’s coffers and made it one of the largest holders of US Treasury and other securities. But as the global economic downturn cramps its development plans and strains its financial system, the government has increased its support of the local economy, putting a strain on public finances.
Saudi Arabia injected SR31.4 billion in the fourth quarter of 2008 to support its financial system through a variety of measures including direct deposits into local banks.
The central bank also arranged deposits of SR17.9 billion by government-owned entities, which helped lower the local banks’ loan-to-deposit ratios and freed up lenders to extend credit to consumers and businesses in the kingdom.
Liquidity conditions have eased in Saudi Arabia this year, with the broadest measure of money supply growth inching up slightly to 15.8per cent in March. Saudi Arabia’s domestic liquidity has crossed SR1 trillion-mark, the Saudi Arabian Monetary Agency said in an earlier announcement.
Sama cut its reverse repo rate by 25 basis points to 0.5 per cent in mid-April, saying then the move was designed to realign the reverse repo with short-dated market rates, which have fallen to historic lows as liquidity conditions have improved and the need for interbank lending has diminished. According to Samba Financial Group’s Economic Monitor for April, banks’ non-statutory deposits with SAMA have risen sharply since the intensification of the global financial crisis in the third quarter of last year, reaching SR74 billion by end-February, up from virtually nothing in October 2008.
Simultaneously, banks have also reined in lending to the private sector: Year-on-year growth in lending remains strong, at around 17 per cent, but it has slowed sharply over the past six months, while month-to-month values have fallen.
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