Saudi banks ask for help after a financial crisis

By the Saudi Arabian Monetary Agency (central bank) Issued soft loans to the local banks to ease the liquidity crisis in the kingdom that momentum has been increased significantly recently.

The site said that the value of those soft loans amounted to nearly four billion dollars for one year, note that the liquidity crisis in the Saudi banking system partly arisen because of the actions taken by the authorities against the backdrop of falling oil prices sharply in recent years, in addition to a decline in foreign exchange earnings in large, and the unwillingness of the Saudis to unzip the local currency link (rial) to the US dollar.

This led to a large deficit in the budget, the government attempted filled it through the sale of bonds in the local currency, as well as the withdrawal of deposits from banks. Riyal pegged at around 3.75 to the dollar,  Saudi authorities pledged to retain this constant connectivity for almost 30 years despite the difficulties caused by falling oil prices, rising value of US currency against major currencies, while investors awaited increase in US interest rates.

Monica Malik senior economist at Abu Dhabi Commercial Bank predicted that Saudi Arabia, the largest crude oil exporter in the world, in the near future to take further measures to achieve stability in the Saudi banking market, likely that the financial authorities raise the proportion of roof loans and deposits in banks.

as well as the oil prices retreated, foreign exchange revenues will decrease, and the budget deficit will increase, and thus will lead to increased pressure on the local currency, what will led to big risks on the growth of the Saudi economy.