Saudi Arabia to Pump $13 Billion Into Banks to Offset Twin Shock

Saudi Arabia unveiled a $13.3 billion stimulus package to protect banks against an expected drop in profits and rise in bad loans as they confront the double whammy of the coronavirus shock and lower oil prices, Bloomberg News reported. The move by the central bank, the Saudi Arabian Monetary Authority, will help lenders amend and restructure loans, without additional fees, and support private sector employment and credit. It follows a 50-billion-riyal ($13.3 billion) program in March to help banks provide loans to businesses so companies didn’t have to cut jobs. Saudi Arabia’s non-oil economy is expected to contract for the first time in over 30 years. Lenders in the world’s largest oil exporter -- already dealing with a fragile economy before this year’s crisis -- are expected to be hit hard as lockdown measures and lower government spending impact earnings and increase defaults. Read more