Saudi Central Bank Raises Interest Rates 0.5%
The Saudi Central Bank has decided to raise the rate of the Repurchase Agreement (Repo) by 50 basis points (0.5%) to 5%, and the rate of the Reverse Repurchase Agreement (Reverse Repo) by 50 basis points to 4.5%.
The Saudi Central Bank said that the decision is in line with the central bank’s objectives of maintaining monetary stability and supporting financial stability.
Federal Reserve Chairman Jerome Powell said the recent news was welcome but he still sees services inflation as too high.
“There’s an expectation really that the services inflation will not move down so quickly, so we’ll have to stay at it,” he said. “We may have to raise rates higher to get where we want to go.”
“I don’t think anyone knows whether we’re going to have a recession or not,” Fed Chair Jerome H. Powell said at a news conference. “And if we do, whether it’s going to be a deep one or not — it’s just not knowable.”
Despite the risk, the Fed is on track to hike rates past 5 percent next year, according to projections released at the end of the central bank’s two-day policy meeting.