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Saudi Gazette report
RIYADH — The Saudi Central Bank (SAMA) decided to reduce the repurchase agreement (repo) rate by 50 basis points to 5.50%, and reduce the reverse repurchase agreement (reverse repo) rate by 50 basis points to 5.00%.
The bank said the decision is consistent with its goal of maintaining monetary stability.
Other Gulf central banks (UAE, Bahrain, Qatar, and Kuwait) followed the US Federal Reserve’s moves by lowering interest rates.
The US Federal Reserve cut its interest rate for the first time since 2020, by 50 basis points, to a range of between 4.75 and 5%, and is heading toward a similar additional cut by the end of 2024.
The decision was not unanimous at this last Fed meeting before the US elections on November 5, as Governor Michelle Bowman supported only a quarter-point rate cut.
The Fed statement said: “There are recent indications that economic activity has continued to expand at a steady pace. Job gains have slowed, the unemployment rate has risen but remains low, and inflation has made further progress toward the Committee’s 2 percent objective but remains moderately elevated.”
According to the statement, “The FOMC seeks to achieve maximum employment and 2 percent inflation over the longer term. The Committee has gained confidence that inflation is moving sustainably toward its target, and it judges that the risks to achieving the employment and inflation goals are roughly balanced. The economic outlook is uncertain, and the Committee is alert to risks to both.”
