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Sunday, 20 November 2016

Large Saudi bank cuts money quote; rates may fall back below repo | Reuters

Large Saudi bank cuts money quote; rates may fall back below repo | Reuters:
"Saudi Arabia's biggest commercial bank cut its quote for three-month money in the interbank market on Sunday in a signal that rates could fall further as a liquidity crunch in the banking system eases.

Saudi interbank offered rates soared this year, pressuring companies and banks seeking to raise funds, as low oil prices slashed flows of petrodollars into banks and forced the government to issue bonds domestically to fund a big budget deficit.

Three-month SAIBOR hit a seven-year high of 2.386 percent last month, from below 0.80 percent in August 2015. In a sign of unusual stress on the system, it rose above the central bank's repurchase rate of 2.00 percent, which the central bank uses to supply funds overnight to banks caught short of money."

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