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  • Saudi government suspends domestic bond issues for fourth month

    Saudi Arabia’s government has decided to suspend its monthly issue of domestic bonds in January, refraining from issuing local currency bonds for the fourth month in a row, the Maaal financial news service reported on Monday.

    The suspension is possible because higher oil prices have improved government revenues and the government’s $17.5 billion issue of international bonds last October was successful, Maaal quoted unnamed official sources as saying.

    Liquidity at banks is now good, after the government started to make delayed payments of its debts to the private sector, and banks would be able to cover any local bond issue if one occurred, the sources added.

    Although the government needs to cover a large budget deficit, it halted domestic bond issues to ease pressure on banking liquidity and bring down money rates, a strategy which has succeeded.

    Finance minister Mohammed al-Jadaan told Reuters late last month that Riyadh expected to resume monthly domestic bond sales sometime in the first quarter of 2017 and also planned to tap international debt markets again this year. Bankers believe an international issue could come as soon as in the first quarter.

    Courtesy AMEinfo

    Courtesy Arab News



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