Saudi Central Bank Holds Repo Rate at 4.25% in 2026

The Saudi Central Bank has kept its benchmark repo rate steady at 4.25% in 2026, maintaining a cautious monetary stance backed by strong liquidity and low inflation. The reverse repo rate stood at 3.75% based on late 2025 and early 2026 data.

Inflation remained contained at 1.8% in May 2026, a level that supports household purchasing power for residents and expats across the Kingdom. Liquidity across the financial system stayed robust, with broad money (M3) reaching roughly SAR 3.3 to 3.4 trillion in spring 2026, while reserve assets were reported near SAR 1.9 trillion.

The central bank described the banking sector's capital and liquidity buffers as strong. As part of a prudent approach, the countercyclical capital buffer was raised from 0% to 1%, effective 25 May 2026, a step that strengthens the resilience of local banks against potential future shocks.

Why it matters

Holding the policy rate keeps borrowing and financing costs stable, which affects everything from mortgages and personal loans to business financing. The steady stance also reflects the continued anchoring of the Saudi riyal to the U.S. dollar, a long-standing pillar of the country's monetary policy.

For the wider community, contained inflation and stable rates provide predictability in daily spending and long-term financial planning. The reinforced capital buffers add an extra layer of stability to the banking system that serves millions of customers nationwide.

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