Gulf central banks have introduced stimulus measures worth tens of billions of dollars including loan repayment holidays to distressed businesses and individuals and fee waivers.
But Gulf oil producers, facing the prospect of a sharp rise in fiscal deficits, have also started to scale back state projects.
Gulf lenders face an expected drop in loan growth in crisis-affected industries such as retail, tourism and transport, but they must also navigate the impact of plunging crude prices on the region.
And while central banks in the region have followed global counterparts in cutting interest rates, this is expected to reduce bank profitability with narrower net interest margins and is unlikely to boost credit volumes due to the pandemic.
The Saudi Arabian Monetary Authority has postponed reviews of some bank capital adequacy ratios and the introduction of regulations on provisions to give them more lending capacity.
