MIDEAST DEBT-Gulf's rate reprieve may end as U.S. spreads stop narrowing

MIDEAST DEBT-Gulf's rate reprieve may end as U.S. spreads stop narrowing:

"A dramatic narrowing of spreads between interest rates in the United States and the Gulf cushioned the region’s economies last year, but the trend may be close to ending as demand for loans picks up and monetary policy tightens further.

Any move towards significantly higher regional rates - those in Saudi Arabia have actually fallen in the past year, against the U.S. tide - could weigh on a modest acceleration of economic growth expected in 2018.

In theory, short-term money rates in the United States and the Gulf should move in similar ways as the region’s currencies are closely linked to the U.S. dollar, leaving central banks little room to conduct independent monetary policies."



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