SAUDI ARABIA: Saudi central bank chief Fahad al-Mubarak says inflation is running at acceptable levels
Record ID:
189123
SAUDI ARABIA: Saudi central bank chief Fahad al-Mubarak says inflation is running at acceptable levels
- Title: SAUDI ARABIA: Saudi central bank chief Fahad al-Mubarak says inflation is running at acceptable levels
- Date: 3rd March 2013
- Summary: RIYADH, SAUDI ARABIA (MARCH 3 ,2013) (REUTERS) FAHAD AL-MUBARAK, GOVERNOR OF THE SAUDI ARABIAN MONETARY AGENCY (SAMA) ENTERING NEWS CONFERENCE ROOM REPORTERS (SOUNDBITE) (Arabic), FAHAD AL-MUBARAK, GOVERNOR OF THE SAUDI ARABIAN MONETARY AGENCY, SAYING: "Usually the agency (SAMA) does not make projections on the volume of growth in general. But we can infer from the International Monetary Fund, which has issued its forecast for growth in the Saudi economy at 4.2 in 2013 and 3.8 in 2014. It is expected that most of this growth will come from the private sector and the government sector, if we assume that the level of oil production continues as it has been since the beginning of the year." REPORTERS LISTENING REPORTER ASKING FAHAD AL-MUBARAK A QUESTION (SOUNDBITE) (English) FAHAD AL-MUBARAK, GOVERNOR OF THE SAUDI ARABIAN MONETARY AGENCY, SAYING: "Not at all. The bank lending to the private sector is consistent with all the policies that SAMA puts and monitors, the loan to deposit is about 75 percent, the cap that SAMA puts is 85 percent. So we are well below our cap. It is positive that the banks continue to lend to the private sector." REPORTER USING MOBILE PHONE REPORTERS LISTENING (SOUNDBITE) (Arabic) FAHAD AL-MUBARAK, GOVERNOR OF THE SAUDI ARABIAN MONETARY AGENCY, SAYING: "All Saudi banks conform to the requirements of Basel III, in terms of solvency or liquidity or in all respects." REPORTERS LISTENING EXTERIOR OF SAMA BUILDING LOGO OF SAMA SAUDI FLAG FLYING
- Embargoed: 18th March 2013 12:00
- Keywords:
- Location: Saudi Arabia
- Country: Saudi Arabia
- Topics: Economy,Politics
- Reuters ID: LVA9GLM91UGP4GXBD0KBJ1B1Y8JD
- Story Text: Inflation in Saudi Arabia is running at acceptable levels, the country's central bank chief said on Sunday (March 3), playing down concerns that the economy could be overheating.
Fahad al-Mubarak, governor of the Saudi Arabian Monetary Agency (SAMA), told a news conference inflation was expected to ease next year having edged up to a seven-month high of 4.2 percent year-on-year in January.
However, he declined to provide a forecast for Saudi economic growth, saying SAMA took guidance from IMF predictions.
"Usually the agency (SAMA) does not make projections on the volume of growth in general. But we can infer from the International Monetary Fund, which has issued its forecast for growth in the Saudi economy at 4.2 in 2013 and 3.8 in 2014. It is expected that most of this growth will come from the private sector and the government sector, if we assume that the level of oil production continues as it has been since the beginning of the year," Mubarak told the news conference.
Saudi Arabia has recovered since a 2009 downturn, helped by heavy public spending on welfare and housing construction, driven in part by reaction to unrest elsewhere in the Arab world.
But growth of the $728 billion Saudi economy, the largest in the Arab world, slowed to 6.8 percent last year from 8.5 percent in 2011, when it was buoyed by a higher oil output to compensate for shortages due to a civil war in Libya.
Asked if he was concerned about the high level of bank lending to the private sector, Mubarak said: "Not at all. The bank lending to the private sector is consistent with all the policies that SAMA puts and monitors, the loan to deposit is about 75 percent, the cap that SAMA puts is 85 percent. So we are well below our cap. It is positive that the banks continue to lend to the private sector."
Bank lending to Saudi Arabia's private sector rose 15.9 percent in January, only slightly slower than a 16.4 percent increase in the previous month, which was the fastest clip since February 2009.
Mubarak said it was positive that the banks were continuing to lend to the private sector and said the quality of banks' lending portfolios had improved in recent years, resulting in fewer bad loans.
Banks in the kingdom were also adhering to international banking rules, he said.
"All Saudi banks conform to the requirements of Basel III in terms of solvency or liquidity or in all respects," said Mubarak.
An international agreement known as 'Basel III' forces banks to set aside far more capital to withstand market shocks, in a bid to lessen the need for bailouts by governments.
The stricter regulations were drawn up in response to the 2007-2009 global financial crisis. However, many countries have so far delayed implementing them. - Copyright Holder: REUTERS
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