Oct 09 2010 |
more articles from
|
Outlook for 2010-14: Monetary policy
The currency's peg to the US dollar, which is likely to be maintained throughout the forecast period, means that the main policy rate of the Saudi Arabian Monetary Agency ( SAMA , the central bank) must roughly track movements in US interest rates, although this can sometimes lead to economic distortions when the two countries' growth paths are misaligned. The reverse repo (repurchase), or deposit, rate was cut to 0.25% in June 2009, following another cut by 25 basis points in April. The Federal Reserve (the US central bank) is expected to maintain rates at a low level throughout 2010 and is likely to begin monetary tightening in 2012 with US dollar three-month commercial paper reaching 4.1% by 2014. SAMA will follow these broad trends but may begin to tighten monetary policy ahead of the US owing to concerns about rising inflation and money supply growth. A small premium is likely to be maintained given Saudi concerns about inflation.
Credit to the private sector stagnated for much of 2009 owing to banks' concerns about corporate risk and as companies adjusted to new lending requirements. However, it picked up in early 2010 and is likely to continue expanding. The bulk of current lending may be going to larger companies, and the government may privately lean on banks to increase their lending to smaller businesses in the domestic private sector.
Zawya Comment Policy
-
Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse. - The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
- Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
- By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
Copyright © 2012 Zawya Ltd. All rights reserved. |
provided by www.zawya.com |
Post Your Comment