Business | Banking
Saudi central bank injects more money
Several Saudi financial analysts noted that the central bank's latest injection of $3 billion (Dh11 billion) to boost the liquidity of local banks could be an indication of a financial crisis that the banks are facing.
- By Mariam Al Hakeem, Correspondent
- Published: 23:56 October 22, 2008
Riyadh: Several Saudi financial analysts noted that the central bank's latest injection of $3 billion (Dh11 billion) to boost the liquidity of local banks could be an indication of a financial crisis that the banks are facing.
They pointed out that this is the first time the Saudi Arabian Monetary Agency (Sama), the central bank, has been forced to take such a step over the past 10 years. Sama made deposits worth up to $3 billion with banks struggling to cope with the global fin-ancial crisis.
Sama has so far made no announcements with regard to the initiative.
But the Saudi bankers say the central bank took the latest step to defrost interbank lending by pouring $3 billion in the form of riyal and dollar deposits with banks.
Saudi analysts noted that the global financial crisis also put the Saudi banks in a difficult situation and it was very difficult for them to get any loans.
According to Faisal Al Husseini, a noted financial expert, the bank's decision is a reassuring move for investors who have deposits in the local banks.
"It also reemphasizes SAMA's capacity to make a direct intervention in coping with difficult situations," he said.
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