Saudi Arabia broadens Central Bank’s mandate to promote growth

SourceGulf Business
SectorFinancial Services
CountrySaudi Arabia

The Saudi Central Bank updated its mandate to include supporting economic growth as one of its prime objectives, formally changing its fundamental operating principles for the first time in more than 60 years, vice-governor Ayman Alsayari said. “Including support of economic growth as an explicit element in the central bank’s mandate is meant to cover evolving variables such as financial innovation, which has the potential to foster economic growth if steered in the appropriate direction,” Alsayari said in a written response to questions from Bloomberg on Thursday. The central bank’s new charter also reflects “changes in the financial sector and new types of risk,” he said. The bank now reports directly to the king under the new charter, a move intended to “make its independent status clearer and more explicit,” he said. Saudi Arabia’s central bank has been one of the key vehicles for providing stimulus to the economy this year as the coronavirus pandemic ravaged the private sector, and as authorities refrained from providing a significant fiscal response. The monetary authority has provided over SAR100bn ($22.4bn) to local banks in liquidity injections and to cover the costs of loan deferrals for small businesses hit by the pandemic. The economy is expected to more...