SAMA cuts reverse repo, repo rates by 25 bps

SAMA’s rate cut follows the US Federal Reserve’s move on Wednesday to cut interest rates by 25 bps

The Saudi Central Bank (SAMA) cut the reverse repurchase agreement (reverse repo) rate by 25 basis points (bps) from 400 to 375 bps.

The central bank also lowered the repurchase agreement (repo) rate by 25 bps from 450 to 425 bps.

The decision followed the US Federal Reserve’s earlier move on Wednesday to cut interest rates by 25 bps, bringing the rate to 3.50%–3.75%, down from 3.75%–4.00%.

SAMA typically mirrors the US Federal Reserve's interest rate changes, given the peg between the Saudi riyal and the US dollar.

The reverse repo rate is the interest that banks earn when they deposit funds with the central bank, while the repo rate is the lending rate that the central bank charges commercial banks.