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Sama hikes interest rates to safeguard stability
The Saudi Central Bank "SAMA" has decided to raise key interest rates. The repurchase agreement rate ("repo") has increased by 25 basis points to reach 4.50%, and the reverse repo rate has been raised to 4.00%. This decision aims to enhance liquidity stability, support the resilience of the financial sector, and maintain the stability of purchasing power, in line with the monetary tightening pursued by the U.S. Federal Reserve amid expectations of interest rate hikes through the end of 2026. It is forecasted that rates will rise to between 4.00% and 4.25% by the year's end. This move is part of Saudi Arabia’s efforts to regulate funding flows and encourage deposits in local currency, amidst the ongoing global trend of tightening monetary policies to combat inflation.
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