The value of new import letters of credit (L/Cs) issued in Saudi Arabia during August increased by more than 40 per cent compared with the same month last year.

The increase reflects the Kingdom's strong economic position, which has been bolstered lately by rising oil prices.

L/C increases

According to the latest data provided by the Saudi Arabian Monetary Agency (SAMA), there was a 41.4 per cent annual rise in new import L/Cs issued in August compared with the same month in 2009.

The data says the value of L/Cs used to import automobiles - which represented a quarter of the total value of import L/Cs in August - rose by 23.3 per cent compared with the same month last year.

Food imports purchased via L/Cs more than doubled while the value of L/Cs used to buy building materials grew by 34 per cent according to SAMA's data.

Sound economy

The Saudi economy is benefiting from higher oil prices and strong energy demand from Asia, where most of the Kingdom's hydrocarbon exports go.

Meanwhile, the public sector spending programme introduced to stimulate the economy during the financial crisis continues to drive the domestic economy.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.