September 16, 2018 / 11:28 AM / a year ago

UPDATE 1-Saudi official: rising interest rates not a worry

(Adds comment on impact of local debt issues)

RIYADH, Sept 16 (Reuters) - The Saudi Arabian central bank is not worried by rising market interest rates because they are based on a gradual rise of global rates from a low base, Ayman bin Mohammed al-Sayari, the bank’s deputy governor for investment, said on Sunday.

“The fact that the increase is gradual gives a lot of comfort to SAMA to address any issues that could come up in the local liquidity system — something that we have not witnessed so far because liquidity is ample,” he told a news conference.

“We are not that concerned.”

Sayari also said monthly local currency debt issues by the government were not straining liquidity.

“When it comes to the local market, I believe the level of debt this far is not really an alarming level nor in quantum, nor in percentage, for example of GDP.

“Usually there’s a lag time for the Ministry of Finance to raise debt and release it in the form of a rise in government spending, so liquidity gets recycled in the system and we don’t have any concern.” (Reporting by Stephen Kalin and Marwa Rashad; Writing by Andrew Torchia)

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