Saudi economy safe from global meltdown, says top official

October 8th, 2008 - 6:55 pm ICT by IANS  

Dubai, Oct 8 (IANS) Saudi Arabia’s economy and financial institutions will not be greatly affected by the global financial crisis as these have not been exposed to the international financial institutions that faced problems in recent times, a senior official was quoted here as saying.Mohammad Al-Jasser, deputy governor of Saudi Arabian Monetary Authority (SAMA), said the Saudi economy has never witnessed problems in liquidity, and that there was a 21 percent growth in the last eight months compared to 18 percent last year, the official Saudi Press Agency (SPA) reported.

The report quoted the official as telling the Channel 1 television channel that deposits grew by more than 22 percent in the first eight months of this year, compared to the same period last year.

“We are not facing any problem as regards liquidity in the Saudi economy,” he said.

Stating that SAMA has the capability and means to deal with problems of liquidity, Al-Jasser said the central bank has been continuously and accurately following up the developments at the market and was ready to make adequate liquidity available if the market needed.

He said all these means are available for the banks to obtain liquidity, and added: “We have the mechanism for repurchasing of liquidity not used by the banks.”

However, the senior central bank official said the country’s stock markets were affected by the current global meltdown.

“I think the infection at the international stock market may have affected our stock market,” Al-Jasser was quoted as saying.

He also reiterated that the deposits at Saudi banks were secure and noted that the rate of loans amounted to 116 percent of the volume of deposits in the Saudi economy.

That was why, the official said, nothing could justify becoming afraid from the impact of international financial crisis.

He also made it clear SAMA would not allow endangering deposits at Saudi banks.

“Nothing can justify the existing fears in this respect,” Al-Jasser said.

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