Saudi Arabia injects 50 billion riyals in liquidity-starved banks: Report

Saudi Arabia injects 50 billion riyals in liquidity-starved banks: Report

The Saudi Central Bank placed about 50 billion riyals ($13 billion) as time deposits with commercial lenders, according to people familiar with the matter, seeking to ease the worst liquidity crunch in over a decade. The intervention started just before the US Federal Reserve’s interest-rate hike this month, and consisted of money provided to banks at a discount to the three-month Saudi Interbank Offered Rate, or Saibor, used as a benchmark to price loans, the people said, asking not to be identified as the information is private. The central bank, also known as SAMA, didn’t immediately respond to a request for comment. Liquidity conditions as measured by Saibor are the tightest since late 2008, when the price of crude collapsed below $40 a barrel. The extent of the funding stress among Saudi banks has little precedent outside periods when oil prices were crashing or global crises like the credit crunch of 2008-2009. This year, by contrast, Saudi Arabia is on track to run its first budget surplus in about a decade after seeing revenues soar on the back of a rally in oil prices above $100 and rising production. The funding from the central bank came in at least three