IMF: Saudi banking sector set to weather storm

Riyadh—The Saudi Arabian banking sector is strong and well-positioned to weather the economic slow-down in the country, according to Tim Callen, Division Chief in the IMF’s Middle East and Central Asia Department following an International Monetary Fund (IMF) team visit to Saudi Arabia. Vision 2030 is a key element in bolstering and strengthening the country’s economy in the face of declining growth.
“SAMA [Saudi Arabian Monetary Agency] continues to strengthen its regulation and supervision, including by introducing D-SIB and countercyclical capital buffer charges. A deposit insurance scheme has also been introduced. A formal and transparent macroprudential framework should be introduced to further enhance coordination among the key financial regulators,” said Callen. “The exchange rate peg to the US dollar continues to serve Saudi Arabia well given the structure of the economy.”
According to Callen, there has been significant reform acceleration in Saudi Arabia, particularly since the introduction of Vision 2030, which aims to transform the Saudi Arabian economy and encourage economic diversification away from the hydrocarbons sector. The Vision will be key to increasing the role of the private sector, and furthering the Saudisation agenda in the country, and further details on how these goals will be achieved are expected in the next few months.—Agencies

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