Saudi Arabia's banks ‘have enough cash’

Saudi Arabia's banks ‘have enough cash’
Updated 07 August 2016

Saudi Arabia's banks ‘have enough cash’

Saudi Arabia's banks ‘have enough cash’

JEDDAH: Saudi banks have enough cash, according to Talat Hafiz, secretary general of Media and Banking Awareness Committee of Saudi banks.
Commenting on recent media reports that Saudi Arabian Monetary Agency (SAMA) offered short-term loans to banks in late June, Hafiz said there is nothing unusual about SAMA’s action.
“This is a regular and routine practice of SAMA. As the Kingdom’s central bank it ensures that the banks have enough cash.” Hafiz stated and rejected claims about any cash/liquidity constraints in the Saudi banking sector.
“The Saudi banking sector is liquid as evidenced and reflected by all liquidity and financial stability indicators in the banking sector,” he confirmed.
Sami A. Al-Nwaisir, chairman, Al-Sami Holding Group, said SAMA’s intervention was aimed at easing any possible liquidity squeeze in the banking sector. “It has been the central bank’s role to use monetary policy instruments at its disposal. We don’t see it as an abnormal move. Credit expansion is still healthy, which is a good sign.”
“The monetary policies of the US, EU and other G20 member states — both advanced and emerging economies — are seen as doing the heavy lifting,” said Al-Nwaisir.
“Bear in mind that we are part of the G20 who agreed collectively to enhance growth in the world economy and deal with any sluggishness of growth. So, it’s both serving the domestic economy and doing our role as a member of the G20,” he added.
Despite crude prices rebounding around 50 percent since the beginning of the year, the government is currently gearing up for the sale of its first international bond on par with other Gulf states, mandating several international investment houses to lead the process, said Said Al-Shaikh, chief economist at the National Commercial Bank.
“This represents a capital inflow, which in turn, will ease liquidity tightness and lessen the burden on the local monetary system.”