• Interbank rates at their highest levels since December 2008 reaching 2.97% at the end of January


    *Majed Al-Khalidi from Riyadh


    Interest rates have risen between banks or so-called SIBOR prices "average three months" by the end of January this year for the 15th month in a row, with a total of 118 basis points, to 2.97 per cent, compared to 1.79 per cent at the end of October 2017.

    According to the analysis of the reports' unit in the newspaper "AlEqtisadiah" that based on data from the Saudi Arabian Monetary Agency, the price of SIBOR was 122.2 months high at the end of December 2008 at 3.138%.


    The prices of SIBOR during the month of January was about 6.7 basis points, compared with its December 2018 prices of 2.90 percent, compared with January 2018 by 108 basis points.

    The interest rates between banks during the month of April rose with the highest monthly change in the past 15 months, by rising by 24.8 basis points, as well as last March, which rose by 17.9 basis points, as this period included a rise in US interest rates.


    This rise in interest rates coincides with the expansion of local banks in the purchase of government bonds, as banks raised their balance during 2018 by about 50.51 billion riyals to the bank liabilities of government bonds about 304.9 billion riyals by the end of 2018 in addition to a slowdown in the growth of bank deposits during the past three years.


    The prices of SIBOR or so-called interest rates between banks was in the upward trend since the end of 2015, compared to its prices over the past seven years, where it was stable between 0.87-0.95 per cent after witnessing a wave of rise since the end of 2015.

    The average interest rate during the fourth quarter of 2015 was 1.1 percent: 1.71 percent in the first quarter of 2016, and 2.07 percent for the second quarter of the year, reaching 2.19 percent by the end of the fourth quarter.


    One of the main reasons for the rise in interest rates also was the Federal Reserve's directives to raise interest rates on the dollar.

    Dollar rates were raised four times in 2018, raising interest rates from 1.5 per cent to 2.5 per cent, while interest rates were raised three times during 2017.


    * Economic Reports Unit

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