The Saudi Central Bank (SAMA) announced today a reduction of the repo agreement rate by 25 basis points to 4.75%, and also lowered the reverse repo agreement rate by the same amount to 4.25%.
This decision comes after a similar move by the U.S. Federal Reserve, which cut interest rates for the first time in 2025, prompting several Gulf central banks to take parallel action.
SAMA explained that the rate cut comes in light of global developments and its commitment to maintaining monetary stability, especially as local markets are affected by international monetary policy steps and global economic factors.
This reduction is considered a pivotal step, as the repo and its mechanisms are key tools used by the central bank to adjust liquidity in the domestic financial system, guide interbank borrowing costs, and influence excess liquidity through the “reverse repo”.
