Al-Marsad newspaper: The economic analyst, Ahmed Al-Shehri, revealed today, Thursday, the importance of high interest rates in relation to inflation and price hikes, following the decision of the “Central Bank of Saudi Arabia” to raise interest rates by 25 basis points.
Al-Shehri said in a tweet on his Twitter account: “The general rule in the rise in interest rates is that it curbs inflation and reduces the prices of almost everything, even real estate.”
He added: “Real estate is either financed by banks and the state together, or by banks only, all of them will cost more, and therefore the impact will be different, as this increases the cost to the state.”
In response to a question regarding the role of interest in real estate prices, Al-Shehri answered; He said: “Previously, the support from the state covered a higher percentage due to the low interest rate.”
And the economist continued: “If the interest rate rises, it will reduce the amount of money that can be given to the borrower, of course from the bank, instead of giving you, for example, a million that gives you 980 thousand.”
It is worth noting that the central banks in Saudi Arabia, the UAE, Bahrain, Qatar and Kuwait raised interest rates by regarding 25 basis points, following the Federal Reserve raised the interest rate by the same amount.
I mean, previously, the support from the state covered a higher percentage due to the low interest rate. If the interest rises, it will reduce the amount of money that can be given to the borrower, of course from the bank, instead of giving you, for example, a million, which gives you 980 thousand, and measure on that…
– Ahmed Al-Shehri (Economy) (@AhmedAllshehri) March 17, 2022
