Monetary and financial update: (Rebound in monetary aggregates)

In December 14, 2016, the Saudi Arabian Monetary Authority (SAMA) increased its reverse repo policy rate by 25bps to 0.75 percent, its second such increase since 2008, mirroring the hikes in the US. Meanwhile, SAMAs key policy repo rate was kept unchanged at 2.0 percent. SAMAs rate increase and the prospect of further Fed hikes in 2017 will not have a significant impact on the domestic liquidity situation. This is specifically due to SAMA recently passing several measures to enhance liquidity in the domestic financial system.