SAMA took certain measures. It reduces the statutory deposit ratio for demand deposits to 7% during 2008 and maintained the ratio of 4% time and savings deposits. It reduces the repo rate of 5.50% in 2008 to 2% in 2009 and reverses repo rate from 2% in 2008 to 0.25% in 2009. It reduces the prices of treasury bills by 50 bp lower than the Saudi interbank deposit rate (SIBID). It placed time deposits with domestic banks on behalf of institutions and government agencies for a relatively long period and in coordination with them. Such deposits are considered as customers deposits included in the ratio of loans to deposits, so this measure helped banks to expand credit. An announcement was made by the Supreme Economic Council that Government will continue for guaranteeing the safety of local bank deposits which assured all depositors for a long time not to have any negative sentiment towards Saudi banks. In the global interbank market, SAMA injected dollar liquidity through direct deposits with local banks and foreign exchange swaps. This liquidity injection helped to mitigate the impact of global events on the local market. Since banks were flush with SAR liquidity so no liquid shortage was there in local currency (Bourland, 2008). The Role of Central Bank of Saudi Arabia in the Global Crisis.
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