Economic effects of low oil prices in Saudi Arabia

2020 ◽  
Author(s):  
Awad Alharbi
Keyword(s):  
Saudi Arabia ◽  
Oil Prices ◽  
Economic Effects

What influences bank lending in Saudi Arabia?

2020 ◽  
Vol 27 (2) ◽  
pp. 125-155
Author(s):  
Ken Miyajima
Keyword(s):  
Saudi Arabia ◽  
Private Sector ◽  
Balance Sheet ◽  
Oil Prices ◽  
Bank Lending ◽  
Policy Implications ◽  
Content Type ◽  
Balance Sheets ◽  
Level Data ◽  
Bank Balance Sheets

PurposeDeterminants of credit growth in Saudi Arabia are investigated.Design/methodology/approachA panel approach is applied to macroeconomic and bank-level data spanning 2000 ‐15.FindingsBank lending is supported by strong bank balance sheet conditions (high capital ratio, and growth of NPL provisioning and deposits), and higher growth of both oil prices and non-oil private sector GDP. Lower bank concentration also helps, likely through greater competition, so does stronger institution. Consistent with the literature, lending by Islamic banks may be more responsive to economic activity. Lending remained robust in 2015 despite oil prices having declined, helped by strong bank balance sheets and as banks reduced their holdings of “excess liquidity”. To support bank lending in the period ahead, bank balance sheets need to remain strong. Fiscal adjustment and a reduced reliance on banks to finance the budget deficit would support credit provision to the private sector.Originality/valueThe paper is first to analyze in detail determinants of bank lending in Saudi Arabia applying a panel approach to bank level data, and draws critical policy implications.

Does geopolitical risk strengthen or depress oil prices and financial liquidity? Evidence from Saudi Arabia

Energy ◽  
2019 ◽  
Vol 187 ◽  
pp. 116003 ◽  
Author(s):  
Chi-Wei Su ◽  
Khalid Khan ◽  
Ran Tao ◽  
Moldovan Nicoleta-Claudia
Keyword(s):  
Saudi Arabia ◽  
Oil Prices ◽  
Financial Liquidity

scholarly journals The Oil Price and Trade Nexus in the Gulf Co-Operation Council Countries

Resources ◽  
2020 ◽  
Vol 9 (12) ◽  
pp. 139
Author(s):  
Tarek Tawfik Yousef Alkhateeb ◽  
Haider Mahmood
Keyword(s):  
Saudi Arabia ◽  
Exchange Rates ◽  
Real Exchange Rates ◽  
Oil Prices ◽  
The Real ◽  
Negative Effect ◽  
Asymmetrical Impact ◽  
Panel Estimates ◽  
Positive Effect ◽  
Country Specific

The present study investigates the asymmetrical impacts of oil prices and real exchange rates on the trade balances in the Gulf Co-operation Council countries. Using panel estimates, we found the symmetrical positive effect from the oil prices and the asymmetrical positive effect from the real exchange rates on the trade balances. For country-specific results, increasing oil prices showed a positive effect on the trade balances in Oman, Saudi Arabia, and the UAE and a negative effect in Kuwait. Decreasing oil prices carried a positive relationship with the trade balances in Bahrain, Oman, Qatar, and the UAE. The oil prices showed an asymmetrical impact on the trade balances in all countries, except Saudi Arabia. Moreover, the depreciation helped to improve the trade balances in Bahrain, Oman, Qatar, and the UAE. The appreciation worsened the trade balances in Oman, the UAE, and Saudi Arabia and improved the trade balance in Kuwait. Moreover, the asymmetrical relationships between the real exchange rates and the trade balances were corroborated in all of the investigated countries.

Iran-Saudi Arabia tensions will increase instability

2016 ◽  
Keyword(s):  
Saudi Arabia ◽  
Oil Prices ◽  
Arab State ◽  
Religious Leaders ◽  
Medium Term ◽  
Content Type ◽  
Verbal Exchanges

Significance This followed a marked intensification of hostile verbal exchanges between Iranian and Saudi officials and religious leaders in the weeks leading up to the annual pilgrimage to sacred Islamic sites in Saudi Arabia in mid-September. The two countries' mutual hostility prevented Iranian citizens from taking part in the hajj. Iran's developing ties with both Russia and Turkey are also raising mutual tension with Saudi Arabia. Impacts Tension between Iran and Saudi Arabia will hinder future efforts by oil producers to agree a strategy leading to a rise in global prices. Mutual hostility between Tehran and Riyadh will be a major factor behind the failure of international efforts to end the war in Yemen. Medium-term low oil prices may threaten Saudi Arabia's ability to provide further financial bail-outs to Egypt, a key Sunni Arab state.

An Empirical Investigation of Oil-Macro-financial Linkages in Saudi Arabia

2017 ◽  
Vol 13 (2) ◽  
Author(s):  
Ken Miyajima
Keyword(s):  
Saudi Arabia ◽  
Interest Rates ◽  
Banking System ◽  
Oil Prices ◽  
Feedback Loops ◽  
Lower Growth ◽  
Policy Makers ◽  
Balance Sheets ◽  
Level Data ◽  
Bank Balance Sheets

AbstractAgainst the backdrop of low oil prices, oil-macro-financial linkages in Saudi Arabia are analyzed by applying panel econometric frameworks (multivariate and vector autoregression) to macro- and micro-level data for 9 banks spanning 1999–2014. Lower growth of oil prices and nonoil private sector output leads dampen credit and deposit growth and lift nonperforming loan ratios. Positive feedback loops within bank balance sheets in turn dampen economic activity. U.S. interest rates are not found to be a key determinant. The banking system remains strong at present, but policy makers should monitor its health with the important macro-financial feedback loops in mind.

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