SAMA raises reverse repo, repo rates by 25 bps

The Saudi Central Bank (SAMA) raised its reverse repurchase agreement (reverse repo) rate by 25 basis points from 3.75% to 4%, and increased its repurchase agreement (repo) rate by 25 basis points from 4.25% to 4.50%.

The decision follows the US Federal Reserve’s 25-basis-point rate hike earlier today, bringing its target range to 3.75%-4%, from 3.50%-3.75% previously.

SAMA typically follows the Fed's interest-rate moves due to the Saudi riyal’s peg to the US dollar.

The reverse repo rate is the interest rate banks earn when depositing funds with the central bank, while the repo rate is the rate at which the central bank lends to banks.