Saudi central bank cuts key interest rates

RIYADH: Saudi Arabia's central bank has cut two key interest rates, as the Arab economic powerhouse looks to offset a tightening of credit markets stemming from the global financial crisis.

In a statement posted on its Web site on Monday, the Saudi Arabian Monetary Agency said it was cutting the repo rate to 2.0 per cent from 2.5 per cent, and the reverse repo rate from 1.5 per cent to 0.75 per cent.

SAMA said previous monetary stimulus efforts appeared to be working. But it added that current market conditions warrant an additional adjustment of interest rates that are "misaligned."

Like most other Gulf Arab states, Saudi Arabia pegs its currency to the US dollar.