Saudi banknotes
The three-month Saudi Arabian Interbank Offered Rate (SAIBOR) extended its upturn to surpass 3% for the first time since mid-December 2008, data compiled by Argaam showed.
SAIBOR rates continued to rise following the decision of the Saudi Central Bank (SAMA) in May to raise interest rates for the second time this year, after the first hike in March.
SAMA lifted the repo and reverse repo rates by 0.5% each to 1.75% and 1.25%, respectively.
This came after the US Federal Reserve increased interest rates by 50 basis points to 1% in early May.
The rise in SAIBOR is expected to raise the cost of finance for companies with high debt levels. This will be negatively reflected on corporate finance charges. The impact is likely to aggravate in case SAIBOR rates continue going up.
On the other hand, higher SAIBOR rates will boost the profitability of banks, which provide finance with variable interest.
|
Reverse Repo and SAIBOR since 2018 |
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|
Period |
Reverse Repo % |
SAIBOR % (3 months) |
Change (Basis Points) |
|
2018 |
|||
|
March |
1.75 |
2.27 |
52 |
|
June |
2.00 |
2.59 |
59 |
|
September |
2.25 |
2.72 |
47 |
|
December |
2.50 |
2.98 |
48 |
|
2019 |
|||
|
March |
2.50 |
2.87 |
37 |
|
June |
2.50 |
2.71 |
21 |
|
September |
2.00 |
2.36 |
36 |
|
December |
1.75 |
2.23 |
48 |
|
2020 |
|||
|
March |
0.50 |
1.19 |
69 |
|
June |
0.50 |
0.99 |
49 |
|
September |
0.50 |
0.87 |
37 |
|
December |
0.50 |
0.82 |
32 |
|
2021 |
|||
|
March |
0.50 |
0.80 |
30 |
|
June |
0.50 |
0.79 |
29 |
|
September |
0.50 |
0.81 |
31 |
|
December |
0.50 |
0.91 |
41 |
|
2022 |
|||
|
March |
0.75 |
2.45 |
170 |
|
April |
1.25 |
2.33 |
108 |
|
May |
1.25 |
3.05 |
180 |
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