Financial pressures against Saudi Arabia despite the recovery of its oil production, what's going on?
A Bank of America report revealed liquidity pressures facing Saudi banks, with the slowdown in bank deposit growth and continued high demand for loans, despite the recovery in oil production.
The report indicated the expansion of liquidity pressures from the United Arab Emirates to Saudi Arabia, as a result of the close relationship between the banks of the two countries and the volume of financial transactions exchanged.
The pressures are mounting as government agencies withdraw their funds from local banks, at the same time as demand for financing rises, pushing the costs of borrowing in Saudi riyals higher.
The Saudi Central Bank faces restrictions on monetary policy due to the peg of the riyal to the dollar, which makes the interest rate largely linked to the decisions of the US Federal Reserve.
The crisis coincides with the escalation of security tensions following the collapse of the ceasefire in Yemen, and the Houthis launched attacks against energy facilities, airports and vital sites, according to the data received.
On the other hand, Saudi Arabia raised its oil output to 10.6 million barrels per day during October, the highest level since February, taking advantage of the East-West pipeline.
Despite the improvement in production.