DUBAI, Jan 30 (Reuters) - Saudi Arabia's three-month interbank offered rate fell below the central bank's repo rate on Monday for the first time since last April, in a fresh sign that a liquidity squeeze due to low oil prices was easing.
The three-month rate
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dropped to 1.999 percent from Sunday's 2.009 percent. The central bank's repo rate, which it uses to lend money overnight to commercial banks caught short of funds, is at 2.00 percent.
In normal times, short-term money rates tend to trade below the repo rate. That ceiling was breached last year as shrunken petrodollar flows due to cheap oil starved banks of funds, sending money rates soaring.
But in recent weeks conditions have eased as the government has raised money through an international bond issue and injected some of those funds into the economy.
(Reporting by Andrew Torchia) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))
The three-month rate
In normal times, short-term money rates tend to trade below the repo rate. That ceiling was breached last year as shrunken petrodollar flows due to cheap oil starved banks of funds, sending money rates soaring.
But in recent weeks conditions have eased as the government has raised money through an international bond issue and injected some of those funds into the economy.
(Reporting by Andrew Torchia) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))
