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Analysts: Saudi banks to benefit from SAMA’s decision

Analysts: Saudi banks to benefit from SAMA’s decision
SAMA will inject SAR 20 billion to boost bank's liquidity and financial stability - (Photo Credit: Arabianeye-Reuters)

By: Thabet Shehata

Riyadh - Mubasher: The Saudi Arabian Monetary Agency’s (SAMA) decision to inject SAR 20 billion ($5.3 billion) in local banks sector through time deposits is seen by analysts as a positive move that came in the right time.

The decision is expected to positively affect the Saudi banking sector and the whole economy in general.

SAMA’s decision is a normal step after the increase in the loans ratio to deposits in most Saudi banks, financial analyst Ali Algaafari told Mubasher.

Meanwhile, former CEO of Al Istithmar Capital Yahya Sulaiman said to Mubasher that the effect of SAMA’s move will appear in the financial results of Saudi banks in Q4-16, alongside its imminent effect in increasing liquidity and stabilising the banks.

The Saudi government’s recent measurements to reduce the budget deficit might hurt sometimes, but will enhance public revenues and increases its ability to support the financial institutions as seen in this decision, Sulaiman added.

The decision also has an indirect effect in supporting the liquidity in the Saudi Stock Exchange which has been seeing a drop to less than SAR 2 billion in some recent sessions, explained Sulaiman.

 

Translated by: Moslem Ali