Raising repo, reverse repo rates to stabilize exchange rate: SAMA

The Saudi Arabian Monetary Authority’s (SAMA) move to raise the repo and reverse repo rates was aimed at stabilizing the exchange rate, a senior official at the central bank told Al-Eqtisadiah newspaper.

This, in turn, will help stabilize inflation in the Kingdom by maintaining import prices, said Assim Al Ghursan, director of the monetary policy and financial stability department at SAMA.

Earlier this week, SAMA hiked its repo rate from 200 basis points (bps) to 225 bps and also raised its reverse repo rate by 25 basis points to 175 bps.

The move came to deal with the recent changes occurring in the local monetary market in-line with the exchange rate policy, Al Ghursan said.