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Saudi Central Bank declares SAR50bn package to combat coronavirus

Saudi Central Bank declares SAR50bn package to combat coronavirus

Around SAR30bn ($7.99bn) is expected to be made available to banks and finance companies in return for deferring small- and medium-size businesses’ loans

The Saudi Arabian Monetary Authority (SAMA), the kingdom’s central bank, announced a SAR50bn ($13.3bn) stimulus package to help small- and medium-sized businesses within the private sector to counter the impact of coronavirus on the economy, reported official news channel Saudi Press Agency.

Of this, around SAR30bn ($7.99bn) is expected to be made available to banks and finance companies in return for deferring small- and medium-size businesses’ loans, reported Bloomberg.

Read: Saudi Arabia suspends all international flights for two weeks

There will be SAR13.2bn ($3.52bn) in loans to small and medium-sized enterprises, provided through banks.

These businesses will also be supported through a SAR6bn ($1.6bn) loan-guarantee programme.

SAMA added it was working with banks and finance companies to support enterprises that were affected by the precautionary measures adopted in the cities of Makkah and Madinah.

Read: Saudi temporarily suspends Umrah for citizens, residents over coronavirus outbreak

On February 27, Saudi Arabia said that it was suspending all Umrah visas and in March added that it was suspending Umrah visits for its citizens and residents too.

The Ministry of Health in Saudi Arabia reported 17 new cases of the Covid-19 coronavirus in the country on Saturday, taking the total number of those infected to 103, of whom two are believed to have fully recovered.
The latest economic stimulus by the Arab world’s largest economy follows similar measures undertaken in the UAE and Egypt.

Egypt said it will allocate 100 billion Egyptian pounds ($6.4bn) to combat coronavirus.

The Central Bank of the UAE meanwhile announced a Dhs100bn ($27.23bn) economic stimulus package to tackle the Covid-19 coronavirus on Saturday.

Read: UAE Central Bank announces Dhs100bn package to counter Covid-19

The Targeted Economic Support Scheme, as the new programme is known, includes Dhs50bn aid for banks in the country through collateralized, zero-interest loans.

Banks will also be allowed to free up capital buffers, which will make another Dhs50bn in liquidity available to lenders.

UAE banks will be allowed to use as much as 60 per cent of their capital conservation buffer while those deemed “systematically important” will be able to utilize their entire buffer.

It will also revise limits on banks’ maximum exposure to real estate, allowing their exposure to the sector to increase up to 30 per cent from 20 per cent currently as long as they have additional capital.

Read: Coronavirus: Dubai reveals Dhs1.5bn stimulus package to support businesses

On Thursday, the government of Dubai announced a separate Dhs1.5bn package that includes cancellation of some fees for businesses and reduction in utility bills for residents for three months.

With inputs from Bloomberg

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