Kingdom’s Monetary Conditions Reassuring -Saudi Chief Central Banker Reasserts

Governor of the Saudi Central Bank (SAMA) Dr. Fahd Al-Mubarak, in a comment, following the announcement of the Saudi first surplus budget, in almost a full decade, reasserted that the monetary conditions, in the Kingdom, are reassuring, and that the banking sector is displaying good financial safety indicators.

Reiterating that was a result of adopted prudent monetary policy, Al-Mubarak indicated that the banking sector enjoys solvency, operational efficiency, good liquidity, and the ability to face and withstand the current challenges.

Indicators of the financial safety in the banking sector pointed out that the sector records good performance, which enhancing its ability to face current challenges and crises that may lying ahead.

SAMA will provide the necessary support for monetary and financial stability immediately – if the need arises – he emphasized, through the tools at avail, in accordance with the monetary policy system, in play, and local liquidity management.

On the occasion of the announcement of the state’s general budget for the Fiscal Year 2022, which focuses on promoting a return to the path of economic recovery, and facing challenges; in order to stimulate economic growth and empower the private sector, he highlighted.

In this regard, the Central Bank of Saudi Arabia will continue to carry out the tasks it entrusted, in a manner consistent with the requirements of the national economy and the Kingdom’s Vision 2030, based on its work on a clear vision of the financial sector realities, on the ground, he elaborated, adding that is a part of its future role, in streamlining the economy.

Despite the exceptional circumstances that the Kingdom has gone through, like the rest of the world; due to the Coronavirus pandemic, the Saudi economy, has proven a highly resilient ability to withstand shocks, grace to a number of factors, the most important of which are: the rapid response from the government, the central bank, and other concerned parties, through stimulus packages, and an array of decisions taken; to preserve the economic gains, on one hand, and to face the consequences and impact of the pandemic, on the other, he explained.

Regarding business continuity in the sectors supervised by the Central Bank of Saudi Arabia, as the economy, as a whole, is on a return to its normal course; Al-Mubarak indicated that various measures have been taken to ensure that all sectors shall not be affected by repercussions or risks that may reversely affect their financial stability.

Pointing out in this context, the Central Bank will continue to develop the structure of the insurance sector, he stressed, by enhancing the strength of the financial positions of companies, citing among the possibilities mergers and acquisitions.

With regard to the finance companies sector; the governor indicated that the sector achieved positive growth indicators, as the number of licensed companies by the end of the third quarter of 2021, reached a total of 44 firms.

As for the electronic payments sector and digital transformation in payments; Al Mubarak confirmed that the sector witnessed a rise in the number of new licensed entities of small and medium-sized enterprises, which would support the local economy and contribute to the digital transformation of payments.

As many as three new financial technology companies were licensed during the current year, in the field of electronic payments, and two digital banks were licensed, he drew attention.

Regarding the management of foreign assets of Saudi Arabia; Al Mubarak indicated that the Central Bank continued its approach, based on balanced investment policies, the use of the latest technologies, and the adoption of international best practices, in the field of asset and risk management as well as performance measurement.

The point is that they have effect on strengthening the financial position of the bank, he made a point clear.

The reserve assets of the Central Bank witnessed a monthly growth of 3 percent, during the month of Nov of 2021; at an amount of SR1,741 billion, he uttered.

In conclusion, the Governor reiterated that the Central Bank will continue to play its role, in maintaining monetary and financial stability, and supporting the realization of the Kingdom’s Vision 2030, by seeking to achieve its objectives, as the former is constituting a major part of the objectives of the Financial Sector Development Program.

All in all, that is for the financial sector to continue its ability to strengthen the constituents of the economy, in general, and to contribute to the process of development and growth, in particular.