Saudi Central Bank Steps Up Efforts to Ease Liquidity Crunch
- Central bank using open-market operations to loosen conditions
- Previous Saudi intervention gave banks only temporary relief
Riyadh, Saudi Arabia.
Photographer: Waseem Obaidi/Bloomberg
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Saudi Arabia’s central bank has stepped up the use of a mechanism to pump money into the financial system as it looks to tackle a liquidity crunch that has helped push borrowing costs for lenders to the highest in decades, according to people familiar with the matter.
The latest intervention is relying on open market operations, the people said, transactions that allow the central bank to provide or drain short-term liquidity in exchange for securities from lenders.