Verdict Staff

Saudi Arabia has relaxed rules on bank lending in a bid to ease liquidity constraints and boost economic growth.

The Saudi Arabian Monetary Agency (SAMA) has told banks that they can now lend the equivalent of 90% of their deposits, up from an earlier limit of 85%.

The move comes as falling oil prices strain the banking sector. Last year, the government issued bonds to banks to cover a capital hole of about $100bn.

The three-month Saudi interbank rate surged to a record 1.73%, the highest in seven years, compared to less than 0.80% in the middle of 2015.