Development of Saudi debt capital market to drive growth: Fitch

Saudi Arabian banknotes

The development of Saudi Arabia's debt capital market (DCM) will drive growth, Fitch Ratings said in a recent report, adding that sukuk dominates riyal issuances.

The DCM will continue to grow, having reached $358.8 billion for all currencies, up 18.4% year-on-year in Q3 2023, with 62% as sukuk and the rest in bonds, the agency said. The DCM growth is expected to be supported by the diversification of funding and the development of capital markets in Saudi Arabia.

"Liquidity available to the banking sector tightened, and we expect deposits to remain the main source of funding for Saudi banks in the longer term," Fitch noted.