KHOBAR, Saudi Arabia, Feb 27 (Reuters) - 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 reported on Monday.
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.
(Reporting by Reem Shamseddine; Writing by Andrew Torchia) ((email@example.com; +9715 6681 7277; Reuters Messaging: firstname.lastname@example.org))