Riyadh, (Business News Report) – Four of SAIBOR, measuring interest rate in Saudi Arabia, tenors recorded the highest rise since 2018, at the end of the year 2021.
Short-term bank lending rates rose between 7.69 and 12.76 percent over the past year.
At the end of last December, the 12-month tenor suspended the highest jump among the other deadlines, at 1.06 percent, compared to 0.94 percent in early 2021.
The one-year tenor become the first to break the 1% barrier, according to the data of the Macrobond platform.
Meanwhile, the one-month tenor did not move much during the past year after closing at 0.70 percent. This is compared to 0.65 percent in early 2021.
The three-month tenor also recorded an increase of 11.11 percent during 2021, after closing at the end of the year at 0.90 percent. This is compared to 0.81 percent at the beginning of the year.
Banking sector workers follow the three-month tenor movement, due to its widespread use with individual and corporate loans.
Entities operating in the financial sector are seeking to expand the growth of their loan portfolio. At the time the Saudi lending interest recording low levels in the historical term.
The slight increase comes with the interest offered between Saudi banks, after the huge IPOs that took place in the past months contributed to attracting large liquidity in the local market.
The preemptive movement of the rise in SAIBOR prices came at a time when dealers in the Saudi money market are re-pricing the four SAIBOR tenors. This is after taking into account the possibility of accelerating the US interest rate hike during 2022.
The interest rates offered between Saudi banks continue to register slight and gradual increases, in a shift that may warn that the prices of the SAIBOR terms have reached their bottom and taken an upward trend.
Globally, the reactions of central banks in emerging and developed markets to raising interest rates vary.
Some of them kept interest rates, and some took the opposite trend towards raising them, in order to keep pace with the growing global price pressures.
By virtue of linking the Saudi currency to the dollar, observers are paying great attention to the movements of Libor, the interest rate offered between banks in London and the decisions of the US Federal Reserve, which is expected to be the first increase in the interest rate during the first quarter of 2022.
The SِِِِِِAIBOR rates during the past 30 months came in favor of corporate loans, personal loans, real estate loans and other loans. The low interest environment contributed to reducing loan payments to borrowers and stimulating economic activity.
