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Saudi Arabia’s Liquidity Reaches $267B
Saudi Arabia’s liquidity rose to 1 Trillion Saudi Riyal ($267B) as the Saudi Arabian Monetary Agency (SAMA) adopted a list of measures to enhance banks’ lending ability. SAMA cut interest rates five time since October to encourage banks to finance new projects. Nevertheless, banks are still cautious about lending that led non-statutory deposits with SAMA to hit 74 Billions Saudi Riyal ($19.7B). In a related economic news, the IMF forecasted that Saudi Arabia’s economy will shrink by 0.9% in 2009 as a drop in oil prices coupled with a global credit markets crisis will harm the economy by hurting exports, investments and consumer spending.
The Jordanian $10B Seawater Desalination Plant
In a strategy to save the Dead Sea from constant shrinking and to provide the Kingdom with much needed fresh water, the Jordanian government will implement a $10B seawater desalination plant project that is expected to be completed within 25-30 years. The project aims at addressing the country’s severe water shortage by providing 120 million cubic meters (mcm) of water in 2014 and expanding to 700mcm in later phases. The government also announced the development of other projects such as the manufacturing of military aircraft in Mafraq, in addition to the $100M loan agreement signed with the French Development Agency and the European Investment Bank for financing the Disi Water Conveyance Project. Worth noting that the Jordanian government and Shell signed an agreement where the latter will explore and extract oil shale reserves.
Kuwait’s Budget Surplus to Hit $20B
Kuwait’s budget may register a KD6.09B ($20.8B) surplus for the year 2008-2009, beating the budget draft projection of a KD7.5B ($25.61B) deficit, according to the country’s Finance Ministry. Total Revenues were KD21.1B ($72.8B), whereas expenditures totaled KD15B ($51B). Oil profits represented the bulk of revenues with a 94% stake ($68B), well above the forecasted ($40), as the 2008-2009 draft budget used an average oil price of $50 a barrel while oil peaked at $147.5 a barrel in 2008. Worth noting that the country posted a KD9B($30B) surplus in 2007-2008. Separately, in order to absorb the liquidity excess, the central bank of Kuwait issued KD908M of treasury bonds in 2009. The auctions were successful with a high bid to cover ratio of 7, as investors showed interest in the country’s bond market at a time when the Kuwaiti equity index is negatively performing throughout 2009.
