Business | Economy
Saudi Arabia's inflation hits 27-year high
Inflation in Saudi Arabia surged to a 27-year high of 8.7 per cent in February as the world's largest oil exporter and its Gulf neighbours lowered interest rates to defend pegs to a tumbling US dollar.
- Reuters
- Published: 00:43 March 24, 2008
Dubai: Inflation in Saudi Arabia surged to a 27-year high of 8.7 per cent in February as the world's largest oil exporter and its Gulf neighbours lowered interest rates to defend pegs to a tumbling US dollar.
Saudi Arabia matched the latest 75 basis point cut by the US Federal Reserve last week along with the UAE and Bahrain. Qatar, where inflation is running at 13.74 per cent, followed on Sunday.
Qatar also tightened lending curbs on banks for a third time since December, in the latest sign of the growing dilemma for Gulf Arab governments, torn between averting currency appreciation and containing soaring prices.
Qatar lowered its deposit rate by 75 basis points to 2.25 per cent but left its lending rate unchanged to avoid stoking growth in money supply in an economy flush with oil and revenues.
It also raised the reserve requirement for banks by one percentage point to 4.75 per cent.
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