These are some key points from Jadwa Investment’s latest Monetary and Financial Update.

Monetary Policy — Domestic: SAMA will be cautious in responding to changes in US interest rates, particularly given negative sentiment associated with lower oil prices, which itself is adding to the cost of borrowing.

Money Supply: The pace of the slowdown in money growth will likely moderate in 2016 following its rapid slowdown toward the end of 2015.

Claims on the public sector: We anticipate net sovereign bond issuances to banks and other autonomous government institutions to reach 120 billion in 2016, compared to SR98 billion in 2015.

Credit to private sector: We forecast further slowdown in credit growth, putting the full year expansion in credit at 6 percent in 2016.

Financial soundness: We see the sufficiently liquid financial system providing room to counter any contraction in money supply during 2016.

Capital outflows: We expect the recent surge in capital outflows to subside when investors are reassured of the government’s commitment toward structural economic reform.