Saudi Gazette report
RIYADH —The Saudi Central Bank (SAMA) decided to reduce the repurchase agreement (repo) rate by 25 basis points (bps) from 450 to 425 bps and the reverse repurchase agreement (reverse repo) rate by 25 basis points from 400 bps to 375 bps.

SAMA has taken this decision in light of global developments and in line with its objective of maintaining monetary stability. The decision followed the US Federal Reserve’s earlier move on Wednesday to cut interest rates by 25 bps.

The SAMA decision comes after the US Federal Reserve cut interest rates on Wednesday. SAMA typically mirrors the US Federal Reserve’s interest rate changes, given the peg between the Saudi riyal and the US dollar.

The repo rate is the lending rate that the central bank charges commercial banks while the reverse repo rate is the interest that banks earn when they deposit funds with the Central Bank.