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 killed 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.
Apart from Saudi Arabia’s war on Yemen, the newly-passed bill cites the kingdom’s execution of top Shia cleric Sheikh Nimr al-Nimr along with 46 other people on January 2.
"The Dutch parliament has set an important precedent and it's time for other arms dealing governments to do the same. The decision can't just be temporary though, it must be permanent,” said a Campaign Against Arms Trade (CAAT) spokesman, Andrew Smith.
The NGO’s spokesman noted that the Dutch embargo will pressure the UK, one of the kingdom’s largest arms suppliers, to follow suit.
"Saudi Arabia has a terrible human rights record and governments like the UK must stop supporting it. The bombardment of Yemen has lasted almost a year now and the humanitarian situation is desperate," he added.
CAAT recently released figures showing that the UK has licensed the sales of over eight billion dollars of military hardware to Saudi Arabia since British Prime Minister David Cameron took office in May 2010.
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