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Saudi Arabia's money rates move higher to reflect kingdom's rate hike
December 17, 2015 / 9:29 AM / 2 years ago

Saudi Arabia's money rates move higher to reflect kingdom's rate hike

DUBAI, Dec 17 (Reuters) - Saudi short-term borrowing costs moved higher on Thursday, though much less than the quarter percentage point rate move by the kingdom the previous day, reflecting that the move was partially factored in by the markets.

Saudi Arabian Monetary Agency raised interest rates within half an hour of the U.S. Federal Reserve’s decision to do so on Wednesday, to avert further speculation on their currency and its peg with the U.S. dollar due to low oil prices.

Other Gulf nations Kuwait, United Arab Emirates and Bahrain also followed suit and announced hikes of a quarter of a percentage point in key official rates, with their money rates also inching up to reflect the new interest rate environment.

The three-month Saudi Interbank Offered Rate (SAIBOR) , which hovered at a three-year low of 0.77 percent between March and July, rose 10 basis points to hit 1.37 percent on Thursday -- its highest level since January 2009.

On Wednesday, the U.S. central bank lifted the range of its benchmark interest rate by a quarter of a percentage point to 0.25-0.50 percent -- its first rate hike in nine years. (Reporting by Archana Narayanan; Editing by David French)

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