RIYADH: The benchmark interest rate has been lowered by 25 basis points to 5.25 percent by the Saudi Arabian central bank, which has carried out its second rate cut of 2024.
The latest US Federal Reserve decision, which lowered rates by the same amount to a goal of 4.5 to 4.75 percent, is reflected in this change.
According to a statement released by the central bank, also known as SAMA, “it has decided to reduce the Repurchase Agreement rate by 25 basis points to 5.25 percent, and the Reverse Repurchase Agreement rate by 25 basis points to 4.75 percent, in light of global developments and under the Central Bank’s objective of maintaining monetary stability.”
This action is a strategic recalibration of monetary policy, in contrast to the greater September cut of 50 basis points, with the goal of reducing the high borrowing costs that have been maintained during the previous two years in order to fight inflation.
Despite having steady inflation rates, the central banks of the Gulf Cooperation Council set interest rates in line with the US Federal Reserve since their currencies are pegged to the US dollar. While Qatar chose a slightly greater 30-point drop, the UAE and Bahrain also lowered rates by 25 basis points.
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