Saudi struggles to spur credit amid crisis

Further cuts in official Saudi interest rates or reserve requirements for banks are unlikely to prove enough to see off a growing crisis in bank lending that centres around trust in borrowers, analysts said on Wednesday.

The Saudi Arabian Monetary Agency (SAMA), will likely follow Tuesday's surprise move to slash its deposit rate for banks holding cash at the central bank with an aggressive cut in its benchmark repo rate to kickstart lending, economists said.

But signs that the domestic money market is beginning to seize up are at heart about concerns that troubles brewing at two Saudi conglomerates will spread and monetary measures will not provide the necessary boost to banks' confidence.