Saudi cbank 'not worried by loan growth, inflation'
Riyadh, March 3, 2013
The Saudi Arabian Monetary Agency is not concerned about current bank lending growth rates, and inflation is tolerable, the governor of the central bank, Fahad al-Mubarak, said on Sunday.
Asked if he was concerned about a high level of bank lending to the private sector, Mubarak said: "Not at all. The bank lending to the private sector is consistent with all the policies that Sama puts (in place) and monitors."
He said loans to deposits were now about 75 per cent, while Sama caps the ratio at 85 per cent.
"It is positive that the banks continue to lend to the private sector," he told a news conference, adding that the quality of banks' lending portfolios had improved in recent years, resulting in fewer bad loans.
Bank lending to Saudi Arabia's private sector rose 15.9 per cent in January, only slightly slower than a 16.4 per cent increase in the previous month, which was the fastest clip since February 2009.
Inflation edged up to a seven-month high of 4.2 per cent year-on-year in January, but Mubarak said: "Current inflation is tolerable, and if you compare to other emerging markets we are well below."
He also said of inflation, "The expectation for this year and next year -- and I will cite the IMF -- is expected to be a bit lower at 4.6 in 2013 and 4.3 in 2014."
Sama said in January that inflationary pressures in the world's top oil exporter should remain stable in the first three months of this year. – Reuters