Title: Crude oil price and bank credit to the private sector in Saudi Arabia

Authors: Chinazaekpere Nwani

Addresses: Department of Economics, Banking and Finance, Gregory University Uturu, P.M.B. 1012, Uturu Abia State, Nigeria

Abstract: This study examines the influence of crude oil price on banking sector credit to the private sector in the Saudi Arabian economy using the autoregressive distributed lag (ARDL) approach to cointegration analysis extended to incorporate the presence of a structural break in the data series over the period 1972-2013. The results highlight the dual effects of crude oil price on the volume of banking sector credit to the private sector in the economy. A positive and significant long-run relationship between banking sector credit to the private sector and the international crude oil price coexists with a negative short-run relationship in the economy. A well-articulated policy framework that will lessen the exposure of banks to movement in crude oil prices and strengthen the level of credit creation by deposit money banks is therefore required in the Saudi Arabian economy.

Keywords: bank credit; crude oil price; private sector; net oil-exporting countries; ARDL-bounds; Saudi Arabia.

DOI: 10.1504/IJEBR.2017.086704

International Journal of Economics and Business Research, 2017 Vol.14 No.2, pp.174 - 193

Received: 03 May 2016
Accepted: 10 Nov 2016
Published online: 21 Sep 2017 *

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