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HomeWorldSaudi inflation 'not worrying', says cenbank chief

Saudi inflation ‘not worrying’, says cenbank chief

Saudi Arabia’s inflation levels are not worrying and will continue to decline, the country’s central bank governor Muhammad Al-Jasser said on Saturday.

“Inflation levels are not worrying. Inflation has become stable since the beginning of the year between around 4.6 and 4.9 (percent)… I expect it to continue its decline,” Al-Jasser told reporters on the sidelines of a conference in Riyadh.

Analysts polled by Reuters in June expected average inflation in the country to reach 5.6 percent in 2011.

Al-Jasser also said that lending levels had risen by more than 9 percent in 2011. “In reality, lending has risen by more than 9 percent this year … an excellent level,” he said. Asked about his expectations for lending in 2012, he said: “I expect it to be good.”

Fears of debt contagion in the euro zone have been shaking global markets over the past few months but Al-Jasser said Saudi Arabia is protected to a great extend from the European debt crisis.

“We are not affected by what is happening in Europe. Our lending and deposits are internal… We have, to a great extent, protection from these developments but we are not in an isolated island,” he said. Saudi Arabia invests heavily in US treasuries.

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