By: Aseel Bin Taleb
Riyadh – Mubasher: The reverse repo policy rate hike will not have an impact on liquidity levels in domestic market, deposit growth, chief economists at the National Commercial Bank (NCB) told Mubasher.
Saed Al Sheikh added that the rate raise won't affect the lending costs, as lending determines the Saudi Interbank Offered Rate (SAIBOR) which amounts to 2.1% and has not changed.
It unlikely that any change would happen to SAIBOR, especially after been cut from 2.4%, the official noted.
The Saudi Arabian Monetary Authority (SAMA) is expected to increase its reverse repo policy rate by 0.50% points in 2017 to mirror the anticipated Federal Funds rate hike.
The Saudi Arabian Monetary Authority (SAMA) increased its reverse repo policy rate by 50 base points after the US Federal raised rate 25 base points by 0.25%.
Al Sheikh pinpointed that the repo rate is still higher than the US rate, as the repo stand at 2% while the US rate at 0.75%, noting that the Saudi banks can borrow from the International Monetary Fund (IMF) based on the repo rate, so SAMA's move will not have an impact at the moment.
Translated by: Sara Ghali
