Alanbat - Sbaa Alsukar
Translated by Mahmoud Alayyat
The study issued by the Arab Monetary Fund recommended the governments
of Arab countries; Focus more on attracting direct investments and portfolio in
assets, so that they do not involve bearing debt burdens, which does not have
negative consequences and potential risks on financial stability in the
countries of Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman, Palestine, Saudi
Arabia, Sudan and Tunisia.
These recommendations came as a result of the study
conducted by the Arab Monetary Fund on "The Implications of Capital Flows on
Financial Stability in the Arab Countries”, which led to the conclusion that
net capital flows may have a negative impact on financial stability in the Arab
countries in the long term, by increasing credit growth, while the types of
capital flows differ in contrast with the implications for financial stability,
especially that the study worked on an additional analysis to study the impact
of types of capital flows on credit to the private sector in the Arab
countries.
The study concluded that "direct and portfolio investments”
have a significant impact on credit to the private sector in the long term,
which does not have concerns about the accumulation of risks on the sector and
financial stability, while other investments show long-term positive effects on
credit provided to the private sector in countries, this indicates that it may
have a long-term negative impact on financial stability
Study, which indicates that it may have a long-term negative
impact on financial stability. In the
same context, the study focused on knowing the impact of net capital flows on
credit to the private sector as a share of GDP, in an attempt to know and
assess the maximum extent that net capital flows can lead to excessive credit
growth, and thus undermine financial stability.
The study aimed to shed light on the impact of capital
flows, whether in the form of direct investment, portfolio investment, or other
investments, on the stability of the financial sector in the Arab countries.