Saudi Arabia’s central bank sees more interest from regional banks seeking to operate in the kingdom, with the economy expected to grow 2 per cent in 2019, its governor said on Wednesday.
Saudi Arabia Monetary Agency (SAMA) Governor Ahmed al-Kholifey also told Reuters that credit growth had accelerated in the first quarter by more than 3 per cent, its fastest pace in more than two years, fuelled by a sharp jump in mortgages and loans to small- and medium-sized enterprises.
He was speaking on the sidelines of a financial forum in Riyadh, where the kingdom announced that Credit Suisse had won approval for a banking licence to operate in Saudi Arabia.
The Swiss bank is one of several foreign investment banks such as Citigroup and Moelis & Co. that have been seeking a presence in the largest Arab economy.
“We have a number of licences in the pipeline right now,” Kholifey said in an interview, adding that interest mainly came from regional institutions. “We see this as a vote of confidence in our economy and in the banking sector in particular.”
The governor said he expected Saudi Arabia’s economy to grow “no less than 2 per cent” this year, exceeding the International Monetary Fund’s forecast of 1.8 per cent growth for 2019.
The economy of the world’s top oil exporter grew 2.2 per cent in 2018, recovering from a contraction a year earlier after revenues and economic activity were hit by a period of low oil prices.
He said Saudi investments were geographically diversified, with foreign assets rising by SAR56bn ($14.93bn) or 1.7 per cent in March over February, suggesting there was no need to further diversify reserves.
The governor also said he saw no need to change interest rates now. The Saudi riyal is pegged to the U.S. dollar and the country’s central bank follows the U.S. Federal Reserve on interest rate moves.
“We are not worried about the peg or the liquidity situation,” he said.