Thursday, September 30, 2021

Saudi Arabia extends deferred payment program again

     Saudi Arabia's central bank eased its policy stance for the second time this year by once again extending one of the support measures it launched last year to support businesses that were most severely affected by the COVID-19 pandemic.
      The Saudi Central Bank, renamed last year from the Saudi Arabian Monetary Authority (SAMA), extended its Deferred Payment Program to Dec. 1, 2021, from Oct. 1, saying this was "for the benefit of micro, small and medium enterprises (MSMEs) that continue to be affected by the COVID-19 precautionary measures."
     In June the Saudi Central Bank also extended the deferred payment program, which allows businesses to delay payments on loans, by 3 months to Sept. 30 from July 1.
     Since the program was launched in March, 2020, it has benefitted more than 107,000 contracts with a value of 174 billion riyals in deferred payments, the central bank said in its statement from Sept. 29.
     The number of contracts benefiting from the bank's Guaranteed Financing Program has exceeded 6,000 contracts, with total financing value of more than 11 billion riyals, it added.
     The economy of Saudi Arabia, the world's top oil exporter, shrank 4.1 percent last year but is recovering this year, helped by the rise in crude oil prices.
     In addition to renaming the central bank, the new law that was approved in November 2020, also gave the Saudi Central Bank responsibility for supporting economic growth in addition to its previous responsibilities of maintaining monetary stability, which includes keeping enough reserves to protect the riyal's peg to the U.S. dollar, and maintaining financial sector stability.
     Under the new law, the central bank reports directly to the King of Saudi Arabia.
     Despite the name change, the Saudi Central Bank will continue to use the acronym of SAMA due to its historic significance, local and global relevance, and banknote bearing the name of the Saudi Arabian Monetary Authority will remain in circulation and keep their status as legal tender.


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