Saudi Press

Saudi Arabia and the world
Saturday, Jun 14, 2025

Rising repo rates likely to hit Saudi manufacturing sector, warns SIDF

Rising repo rates likely to hit Saudi manufacturing sector, warns SIDF

The rising repurchase agreement rates may have a negative impact on the Kingdom’s manufacturing sector, as borrowing from commercial banks will become expensive, warned Saudi Industrial Development Fund.
Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds. It is used by monetary authorities to control inflation.

SIDF, on its website, also noted that rising interest rates could lead to a slowdown in purchasing raw materials or semi-finished goods for certain industries, which could further impact the manufacturing sector’s performance.

The fund said the reduction in cash flow and consumption may also lead to lower profitability and investment in the sector.

“In the context of the Saudi manufacturing sector, the rise in repo rates may make it more challenging for companies to access credit and could result in reduced investment momentum and profitability,” it said quoting experts.

It was in March 2022 that the US Federal Reserve began increasing its federal funds’ rates, which has had a ripple effect on other countries’ economies, including Saudi Arabia.

The Saudi Central Bank, also known as SAMA, had to adjust its repo and reverse repo rates to keep up with the US rising interest rates, bringing rates up to levels not seen since 2008.

Earlier in May, SAMA increased its repo rate by 25 basis points to 5.75 percent and its reverse repo rate also by 25 bps to 5.25 percent.

“While rising interest rates may help control inflation levels and maintain the labor market’s recovery from an economic perspective, it’s important to consider the potential impact on specific industries and sectors, such as manufacturing,” said SIDF.

It added: “The Saudi manufacturing sector may face challenges in the short term due to the rise in interest rates, but the long-term impact remains to be seen.”
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
Black Box Recovered from Air India Crash Site
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Syria to Reconnect to Global Economy After 14 Years of Isolation
Israel Confirms Arming Gaza Clan to Counter Hamas Influence
Global News Roundup: From Ukraine's strategic military strikes and Russia's demands and Tensions Escalate in Ukraine, to serious legal issues faced by Britons in Bali and Trump's media criticism, the latest developments highlight a turbulent landscape
U.S. Reduces Military Presence in Syria
Trump Demands Iran End All Uranium Enrichment in Nuclear Talks
Iran Warns Europe Against Politicizing UN Nuclear Report
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
UAE Offers Free ChatGPT Plus Subscriptions to Citizens
Lebanon Initiates Plan to Disarm Palestinian Factions
Iran and U.S. Make Limited Progress in Nuclear Talks
The Daily Debate: The Fall of the Dollar — Strategic Reset or Economic Self-Destruction?
Trump Administration's Tariff Policies and Dollar Strategy Spark Global Economic Debate
OpenAI Acquires Jony Ive’s Startup for $6.5 Billion to Build a Revolutionary “Third Core Device”
Turkey Weighs Citizens in Public as Erdoğan Launches National Slimming Campaign
Saudi-Spanish Business Forum Commences in Riyadh
Saudi Arabia and Spain Sign MoU to Boost SME Sectors
UK Suspends Trade Talks with Israel Amid Gaza Offensive
Iran and U.S. Set for Fifth Round of Nuclear Talks Amid Rising Tensions
Russia Expands Military Presence Near Finland Amid Rising Tensions
Indian Scholar Arrested in Crackdown Over Pakistan Conflict Commentary
Israel Eases Gaza Blockade Amid Internal Dispute Over Military Strategy
President Biden’s announcement of advanced prostate cancer sparked public sympathy—but behind closed doors, Democrats are in panic
A Chinese company made solar tiles that look way nicer than regular panels!
Indian jet shootdown: the all-robot legion behind China’s PL-15E missiles
The Chinese Dragon: The True Winner in the India-Pakistan Clash
Australia's Venomous Creatures Contribute to Life-Saving Antivenom Programme
×