Saudi Arabia to maintain gas price cap in medium term, official tells Al-Arabiya


Saudi banks’ import funding to the private sector tops pre-pandemic levels at $10.6 billion in second quarter

CAIRO: Saudi private sector import financing surpassed pre-pandemic levels totaling SR39.6 billion ($10.6 billion) in the second quarter of 2022 year-on-year, according to data released by the Central Bank Saudi Arabia, also known as SAMA.

Private sector imports financed by cleared letters of credit and received invoices increased by SR5 billion in the second quarter of 2022 year-on-year, surpassing the pre-pandemic total of SR34.8 billion.

During the COVID-19 pandemic, import financing fell to SR 30 billion in the second quarter of 2020, according to the data.

It then fell back to SR34.6 billion in the second quarter of 2021 as the global economy started to rebound. In 2022, import financing reached its highest level since the third quarter of 2016.

Financing for the import of construction materials, machinery, textiles and garments increased by SR815 million, SR551 million and SR38 million respectively in the second quarter of this year compared to the same period. a year ago.

HIGHLIGHTS

Private sector imports financed by cleared letters of credit and received invoices increased by SR 5 billion in the second quarter of 2022 year-on-year.

Financing for the import of building materials, machinery, textiles and garments increased by SR 815 million, SR 551 million and SR 38 million respectively.

The main contributor to the positive change in the value of private sector imports financed by cleared letters of credit and received invoices was “other goods”.

Foodgrains and fruits and vegetables both rose SR451 million and SR65 million respectively year-on-year in the second quarter.

The three sectors accounted for 10%, 3.7% and 0.5% of total import financing respectively.

The main driver of positive change in the value of private sector imports financed by settled letters of credit and received invoices was “other goods”. This category accounted for half of the total funding and increased by SR4.3 billion year-on-year this quarter.

Nonetheless, LC and invoice financing for Saudi food importers decreased by SR214 million in the second quarter compared to the same period of 2021, the data showed.

Food, which accounted for 12.7% of total private sector import financing, had categories that both increased and decreased over the past year.

Foodgrains and fruits and vegetables both rose SR451 million and SR65 million respectively year-on-year in the second quarter.

Sugar, tea and coffee, livestock and meat and other foods have all seen an annual decline in imports financed by letters of credit and bills settled by Saudi commercial banks. Sugar, tea and coffee accounted for 0.4% of total funding and fell by SR 147 million in this quarter compared to the same quarter in 2021.

Livestock and meat accounted for 0.82% of the total and saw a year-on-year decline of SR 212 million in the second quarter of 2022. While other foodstuffs accounted for 6.5% of the total and fell SR371 million in the second quarter. of 2022 compared to the same period in 2021, the data showed.

In addition to the decrease in the value of agricultural imports financed by letters of credit and invoices, the financing of motor vehicle imports also decreased by SR 265 million, and appliances also decreased by SR 144 million year-on-year in the second trimester.

Regarding the geography of suppliers, the Gulf Cooperation Council contributed 40% of imports financed by letters of credit settled in Saudi banks (excluding invoices), for a total of SR 10.1 billion in the second quarter 2022.

A report published by the International Trade Administration said, “Saudi Arabia has signed various trade agreements (especially with the GCC) which allow member countries full exemption from customs duties.”

Asian countries other than China, Japan and South Korea came second with 22.9% of installed LCs which recorded SR5.7 billion in the second quarter.

Western Europe, China and South Korea follow with 10.2%, 8.4% and 7.1%.

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