Saudi Arabia Macroeconomic Developments
- Saudi Arabia’s gross domestic product is expected to grow at the highest rate in 10 years, to 7.5 percent in 2022, as the country steadily recovers from the pandemic, according to credit rating agency S&P. S&P also updated its outlook for Saudi Arabia to positive and assessed the Kingdom’s short and long-term foreign and local currency sovereign credit ratings to A-/A-2.
- The Saudi Central Bank (SAMA) raised its reverse repo rate by 75 basis points (bps) to 325 bps from 250 bps. It also lifted its repo rate to 375 bps (3.75%) from 300 bps. The rate hike is the fifth this year, as the central bank raised rates in March, May, June and July. SAMA follows the interest rate moves of the U.S. Federal Reserve due to the SAR-USD peg.
- Saudi Arabia’s holdings of U.S. treasuries grew by SAR9 billion ($2.4 billion) MoM to SAR32.4 billion ($121.6 billion) in July, data released by the U.S. Treasury showed. The Kingdom maintained its 16th place among the largest holders of U.S. debt in July.