Saudi Arabia should follow the example of the UAE and encourage its banks to issue bonds for the government to ensure enough liquidity to finance mega projects worth $400 billion (Dh1.46 trillion) in four years, according to a key Saudi bank.
The government should also fund projects directly to offset a sharp decline in foreign financing because of the global credit crisis, the Saudi British Bank (Saab) said in its monthly economic bulletin.
According to the bulletin, Saudi Arabia's 12 banks are not suffering from liquidity shortages but that official curbs on lending and their resources do not match the massive projects to be carried out in the Kingdom.
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