Page last updated at 19:14 GMT, Sunday, 23 November 2008

Saudi Arabia cuts interest rate

Oil pump
Saudi Arabia has been hit by falling oil prices

Saudi Arabia has cut a key interest rate and taken steps to encourage lending as it faces the slowdown.

The central bank reduced the repo interest rate from 4% to 3%, in an attempt to boost liquidity.

It also reduced the cash reserve requirements for banks, seen as a way to improve the availability of credit.

The move came a day after the benchmark Tadawul All Share Index fell to its lowest level in five years, hit by the global slowdown and falling oil prices.

The index shed 9.2% on Saturday, the start of its trading week. Since the start of the year the index is down more than 60%.

The Gulf region has been hard hit by a huge fall in oil prices, a key export.

Oil prices are around two thirds lower than they were in July when they hit a record above $147 a barrel.

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