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- Dubai 05:28 06:46 12:12 15:10 17:32 18:51
Saudi Arabia’s economy is not vulnerable to fresh global financial crisis as its foreign assets climb to their highest ever level on the back of strong oil prices, the Gulf Kingdom’s largest bank said on Tuesday.
After a slowdown in the wake of the 2008 global fiscal distress, Saudi Arabia’s economy almost completely recovered because of high oil prices and an increase in crude output, and this is reflected in a pick in domestic bank credit, National Commercial Bank (NCB) said.
In its weekly report sent to ‘Emirates24|7’, NCB said data for November released by the Saudi Arabian Monetary Agency (Sama), central bank, reflected the healthy standing of credit flows to the private sector.
The report showed credit growth rose by 11 per cent Y/Y to SR824.4 billion, the highest since May 2009.
In contrast, bank claims on the public sector continued its downward trajectory since May, falling to SR220.6bn, driven by the maturity of SR13.9bn of Treasury bills that stood at SR141.1bn.
NCB said this reflects the fact that SAMA is at ease with the prevailing inflation levels that do not necessitate any frantic pace of short-term issuances to mop up liquidity as was the case earlier in 2011.
In addition, the annual growth of monetary aggregates have eased, with the monetary base and money supply falling to 4.2 per cent and 12.4 per cent from 12.8 per cent and 14.4 per cent in October on the back of decreases in the currency outside banks, cash in vault and the other quasi monetary deposits.
“Interestingly, Sama’s net foreign assets (NFAs) continue to rise, amounting to $526.8bn by end-November while Saudi banks’ NFAs rose to $33.8bn, the highest since March,” the report said.
“The record level of NFAs will, obviously, provide a safety cushion for the Saudi economy in 2012 if the sovereign debt problems raging through the eurozone deepens further or China’s economy cooled off.”
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