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Saudi Arabia is reportedly looking to borrow $10bn in its first international loans in a decade | Saudi Arabia is reportedly looking to borrow $10bn in its first international loans in a decade |
(about 1 hour later) | |
Saudi Arabia is reportedly looking for loans worth $10 billion from international lenders in its most significant foreign borrowing in a decade. | |
The Saudi Arabian government is said to have sent an invitation to banks to discuss a US dollar loan. | The Saudi Arabian government is said to have sent an invitation to banks to discuss a US dollar loan. |
While the invitation did not specify an amount, sources said it could be worth $10 billion or more. | While the invitation did not specify an amount, sources said it could be worth $10 billion or more. |
Calls to the Saudi finance ministry and central bank seeking comment were not immediately returned. | Calls to the Saudi finance ministry and central bank seeking comment were not immediately returned. |
Saudi's shock loan request signals that the kingdom looking at other ways to finance its economy after the oil price slump. | Saudi's shock loan request signals that the kingdom looking at other ways to finance its economy after the oil price slump. |
It has already raised domestic petrol prices by up to 40 per cent as part of a raft of measures brought in to address a record budget deficit of $100 billion in 2015. | It has already raised domestic petrol prices by up to 40 per cent as part of a raft of measures brought in to address a record budget deficit of $100 billion in 2015. |
Subsidies for water, electricity and petrol are expected to be dismantled over the next five years. The kingdom has traditionally kept prices low for residents as a social welfare measure. | Subsidies for water, electricity and petrol are expected to be dismantled over the next five years. The kingdom has traditionally kept prices low for residents as a social welfare measure. |
Changes to VAT and an increase in taxes on soft drinks and tobacco are also planned. | Changes to VAT and an increase in taxes on soft drinks and tobacco are also planned. |
Before the oil price started falling in mid-2014, Saudi Arabia, like many other oil-reliant Gulf states, paid down Government debt and borrowed little from international banks. | Before the oil price started falling in mid-2014, Saudi Arabia, like many other oil-reliant Gulf states, paid down Government debt and borrowed little from international banks. |
Many states are expected to increase their borrowing sharply as they reach the limits of how much they can fund themselves through domestic borrowing. | Many states are expected to increase their borrowing sharply as they reach the limits of how much they can fund themselves through domestic borrowing. |
Qatar borrowed $5.5 billion in January, around the same time the government of Oman borrowed $1 billion through an international loan. | Qatar borrowed $5.5 billion in January, around the same time the government of Oman borrowed $1 billion through an international loan. |
Additional reporting by Reuters | Additional reporting by Reuters |
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