Changes in Interest Rates and their Effects on Saudi banks' Performance

Abstract: This study aims to examine the effects of interest rate changes on the performance of Saudi banks; three variables were used to assess the banks' impact: deposits, total credit, and total assets. According to the study, there are no negative effects or signs on any bank performance characteristics when the interest rate on deposits changes. This finding suggests that there was no adverse effect since the interest rate on deposits did not influence the competitive landscape in the banking industry. Unusually, there have been an upward trajectory and a beneficial influence. This is because of the Saudi economy's versatility, which contributes to its annual growth due to its strength in income generation and diversity based on the quantity of sources. The relatively little variation in the interest rate on deposits in the Saudi banking system concerning the level of assets, deposits, and credit facilities may be used to explain the research study's findings. In addition to the robust banking system and well-developed financial system, the Central Bank of Saudi Arabia (SAMA) also provides banks with a regulatory and legislative framework that gives them a greater comparative advantage. Keywords: Interest Rates, Saudi Banks, Performance