Saudi central bank extends coronavirus loan support into next year

Saudi central bank extends coronavirus loan support into next year

Statement from monetary authority said extension aimed at supporting economic growth

The Saudi central bank has extended a loan deferral program to help small businesses cope with the fallout of the coronavirus pandemic until the end of the first quarter next year.

The monetary authority said in a statement that the plan has impacted over SAR77 billion ($20.5bn) of loans and the extension was taken to help support economic growth. Announced in March as one of the kingdom's first responses to the economic costs of the health emergency, the measures have already been prolonged and were due to expire in December.

The central bank has been at the forefront of the kingdom's efforts to protect the economy at a time when the government is set to cut spending in order to stop the budget deficit from widening. Last week, the Saudi central bank's mandate was broadened to formally include promoting economic growth, partly in recognition of the role it was already playing.

In the neighbouring United Arab Emirates, the central bank extended similar stimulus measures through June 2021.

Saudi policy makers provided over SAR114bn ($30.4bn) in free deposits to local lenders in liquidity injections and to cover the costs of loan deferrals for small businesses hit by