RIYADH: The three-month Saudi Arabian Interbank Offered Rate passed the 3 percent mark to reach its highest level in 13 years, following a second interest rate hike this year by the Saudi Central Bank.
SAMA raised the repo and reverse repo rates by 0.5 percent each to 1.75 percent and 1.25 percent, after the US Federal Reserve raised rates by 50 basis points to 1 percent in early May, Argaam reported.
The rise in SAIBOR’s rates is expected to increase the cost of financing for companies with high debt levels, negatively affecting corporate finance charges.
However, a higher SAIBOR rate will increase the profitability of banks that provide fixed-rate financing.
