DUBAI — Saudi Arabia’s central bank is ready to intervene should the Kingdom’s liquidity situation become too tight or credit becomes effected, Ahmed Al-Kholifey, governor of the Saudi Arabian Monetary Authority (SAMA), told Al Arabiya on Sunday.
“We will not hesitate to interfere when liquidity is tight or credit is affected, and the next stage of the stimulus program depends on future developments," he said. “We closely monitor the liquidity, the size of lending to the private sector, and the quality of loans, including non-performing loans.”
Al-Kholifey added the money supply in the Kingdom grew by 6 percent at the end of January 2020.
On Saturday, SAMA announced that it had prepared a 50 billion Saudi riyal ($13 billion) package to help small and medium-sized businesses cope with the economic fallout of the coronavirus pandemic.
“The challenges are the coronavirus and the lower oil price globally, but we are monitoring liquidity indicators and monitoring indicators of capital availability at banks,” Al-Kholifey said. The Kingdom’s economy, the riyal, weakened last week following fears of a price war in the oil market and the commodity’s plunging price. The riyal is pegged to the US dollar. Al-Kholifey said that there was no discussion in changing the riyal’s peg, adding that, “The change in the riyal price is not big.” The global economic cost of the coronavirus still remains to be counted. Some experts have already suggested that the global economy will likely face a recession in 2020, with the airline industry being particularly hard hit as governments continue to expand travel bans.
The coronavirus pandemic has left markets reeling. The US S&P 500 Index ended a historic 11-year bull run last week, while central banks across the world have moved to respond and calm markets.
© Copyright 2020 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
