Moody’s cuts Saudi banking system outlook to negative

Moody’s rating agency has downgraded Saudi Arabia's banking system from "stable" to "negative" as low oil prices continue to batter the kingdom's economy.

"We expect the operating environment for Saudi banks to weaken over the next 12-18 months," said Moody's Vice President and Senior Credit Officer, Olivier Panis, on Wednesday.

The US–based agency further warned of rising "credit risks" across the country's financial system, adding that “persistently low oil prices and resultant government spending declines will ultimately weigh on the Saudi banking sector."

On Monday, the cash-strapped Persian Gulf nation launched fresh austerity measures and ordered ministries to cut contract spending by at least five percent.

The kingdom is facing a budget deficit of nearly $100 billion caused by a sharp slump in oil prices as well as Riyadh’s rising army expenditure, a large amount of which is being funneled into a military campaign against Yemen where at least 8,400 people have been martyred and over 16,000 injured.

Netherlands bans arms exports to Saudi Arabia

Meanwhile, Dutch lawmakers have voted to ban all arms exports to Saudi Arabia over its multiple human rights violations both at home and in its war on Yemen.

With the recent move, the Netherlands has become the first EU state to comply with a recent European Parliament motion calling for a bloc-wide arms embargo on the Saudis.

ME