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Saudi Arabian money rates drop after authorities move to ease liquidity

Saudi Arabian money market rates dropped for a second straight day on Monday after authorities took a series of steps to ease banking system liquidity that had tightened because of low oil prices.

The three-month Saudi interbank offered rate fell to 2.34 percent from Sunday’s 2.36 percent, bringing its drop over the past two days to 4.2 basis points – the biggest two-day fall since rates began rising in August 2015.

The government suspended its monthly local currency bond issue for October and on Thursday, the central bank introduced a new 90-day repurchase agreement to inject funds into the market when needed.

At least some of the proceeds of the government’s record $17.5 billion international bond issue this month are expected to be deposited in local banks, which could further ease liquidity.