KSA cuts interest rates by 0.5pc as economy tightens

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RIYADH, Dec 17 (AFP): Saudi Arabia's central bank yesterday slashed its key interest rate by 0.5 per cent as the world's largest oil exporter feels the repercussions of the global economic slowdown, bankers said.
The Saudi Arabian Monetary Agency (SAMA) reduced its repurchase rate to 2.5 per cent from 3.0 per cent, the fourth cut since October.
The move came ahead of a meeting later in the day at which the US Federal Reserve is expected to further reduce US interest rates, and as Saudi Arabia's economy slows on the back of a sharp fall in oil prices.
SAMA was reacting to a stubborn tightness in the interbank market as corporate borrowers seek more funds from banks because other sources of capital have dried up, said National Commercial Bank economist Tamer el-Zayat.