The Saudi Arabian Monetary Agency raised the official repo rate by 25bps to 3.00 percent on 19 December 2018, following the Fed decision to increase its target range for the federal funds interest rate by a quarter point, to between 2.25 percent and 2.50 percent. The reverse repo rate was also hiked by 25bps to 2.50 percent. Saudi Arabia follows the Fed policy because its currency is pegged to the dollar. Policymakers said the rate adjustments aim to maintain monetary stability amid global financial developments. Interest Rate in Saudi Arabia averaged 3.69 percent from 1992 until 2018, reaching an all time high of 7 percent in May of 2000 and a record low of 1.50 percent in March of 2004.
Interest Rate in Saudi Arabia is expected to be 3.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Saudi Arabia to stand at 3.25 in 12 months time. In the long-term, the Saudi Arabia Interest Rate is projected to trend around 4.00 percent in 2020, according to our econometric models.