Saudi Arabia's booming economy is driving substantial growth in the Kingdom's letter of credit (L/C) and bank guarantee markets.

Both trade financing instruments posted double-digit growth rates last year according to recently released data from Cash Management Matters (CMM).

New data

The value of bank guarantees grew by 11 per cent while L/Cs and acceptances grew by 18 per cent in 2011 compared with the previous year according to CMM.

It published the data in a newly launched publication, Tajara Monitor, which analyses trade finance and corporate banking performance of a dozen Saudi banks.

Trade growth

The first edition of Tajara Monitor also reported strong double-digit growth in both imports and exports in 2011 over 2010.

Exports increased by 45 per cent and imports by 23 per cent on last year compared with the previous year.

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