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Monday, 28 October, 2002, 12:10 GMT
Repatriation boosts Saudi banks
Saudi Aramco's Ras Tanura oil refinery
High oil prices mean a lower budget deficit
The coffers of Saudi Arabia's banks are swelling with money brought home following the 11 September attacks last year.

New figures released by the country's central bank, the Saudi Arabian Monetary Agency, show that the assets of Saudi Arabia's 10 commercial banks were up 8.1% over the 12 months to September.

Total assets were $133.4bn, having climbed steadily over the past year from $123.4bn at the end of September 2001.

But bank deposits grew even faster, rising 11.5% to $81.4bn as money was repatriated from overseas.

Rapid growth in the money supply - the amount of currency actually available for use in the kingdom - supports the view that repatriation has driven the build-up in funds, the central bank said.

Liquidity is up 10% on a year ago, it said.

In the red

The figures also appear to shed some light on public finances.

Commercial banks' claims on the public sector - borrowing from the banks is a major source of funding for the kingdom's huge budget deficit - have fallen 3.7% in the past three months to $34.2bn.

Recent reports from the Saudi banking sector have suggested that higher-than-expected oil revenues - up as much as 50% - mean the deficit will shrink this year.

That would help counterbalance last year's budget, driven $6.7bn into the red in the aftermath of 11 September.

In contrast to the government position, private sector borrowing has soared thanks in part to low interest rates, the central bank said, climbing 12.3% to $55.5bn over the past year.

See also:

11 Feb 02 | Business
22 Jan 02 | Business
19 Jan 02 | South Asia
09 Dec 01 | Business
28 Dec 01 | Country profiles
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