(VOR News) – The Saudi Arabian Inflation stock market was able to successfully end a losing run that lasted for four sessions on Sunday.
The streak had been going on for quite some time. This became feasible as a consequence of the improvement in inflation data that originated from the United States of America.
Given this, which of the following may be appropriate?
As a result of significant improvements made by Al Taiseer Group and Al Rajhi Bank, which resulted in gains of 3.5% and 2.8%, respectively, the benchmark index for Saudi Arabia experienced an increase of 1.2%.
This was because of the advances that each of them had made individually. The Al Taiseer Group was the most important contribution to the accomplishments that should not be ignored on account of their significance.
US inflation data showed that inflation had declined in June.
This may encourage the Federal Reserve to decrease interest rates in September, which would be advantageous for the economy.
Furthermore, the data demonstrated that there was a decline in consumer price inflation. This rise has occurred as a direct result of the United States government’s publication of some facts regarding inflation.
Following the announcement that was made in July, the Federal Reserve has consistently kept its benchmark interest rate at a level that falls between 5.25% and 5.50%. This range has been maintained during the entire period.
Considering that the rate has been raised by 525 basis points since 2022, this is the conclusion that can be drawn from the situation. Because their currencies are tied to the dollar of the United States, the Gulf Cooperation Council (GCC), which includes Saudi Arabia, pays a great deal of attention to the monetary policy that is executed by the Federal Reserve.
This is because the GCC is comprised of countries that are economically interdependent with the United States. Because of this, any potential reductions in interest rates might potentially have a significant impact on the economic strategy that the region employs. In light of the fact that this is the situation, this is the reason.
How can I be concerned about this particular issue?
Furthermore, the stock index of Qatar had an increase of 0.4%, while Industries Qatar reported an improvement of 0.8% in terms of its total performance.
All of these developments occurred simultaneously. Despite this, there was not only great news in the region: Egypt’s blue-chip index dropped by 0.2%, which was driven down by a 1.5% loss in Talaat Mostafa Group as a result of a rise in the price of local fuel.
This was only one of the favourable developments in the region. These two variables were among those that contributed to the downturn.
Throughout the course of the development of the Gulf area, Bahrain suffered a decrease of 0.3%, Oman experienced a loss of 0.6%, and Kuwait witnessed a gain of 0.4%. It is important to note that each and every one of these shifts occurred simultaneously.
The snowball effect that inflation has had in the United States is something that ought to be taken into consideration when taking a step back and looking at the bigger picture.
It is possible that these patterns in the rate of inflation in the United States are responsible for a wide range of effects that have far-reaching implications. As a result of the enhanced economic measures that have been adopted in the United States, it is likely that the Federal Reserve will reduce interest rates.
This is because of the increased economic measures. This would have an effect on the markets and economies all over the world that are dependent on the currency.
This would have an influence on the global economy. The policies of the Federal Reserve are of the utmost significance for the countries that are members of the Gulf Cooperation Council (GCC) due to the fact that their currencies are pegged to the currency of the United States.
The information that is available regarding the rate of inflation in the United States is therefore a key component when it comes to the process of economic planning and the maintenance of stability in the region.
SOURCE: FN
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