science

SAIBOR

SAIBOR is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand SAIBOR rather than just read about it. In short: The Saudi Arabian Interbank Offered Rate (SAIBOR) is a daily reference rate, published by the Saudi Central Bank (SCB or SAMA), based on the averaged interest rates at which Saudi banks offer to lend unsecured funds to other banks in the Saudi Riyal wholesale money market (or interbank market). On 20 November 2016 Thomson Reuters was approved as the SAIBOR administrator and calculation agent by SAMA.

Key takeaways

SAIBOR belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect SAIBOR to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of SAIBOR from memory before moving on to harder problems.

Reference excerpt

The Saudi Arabian Interbank Offered Rate (SAIBOR) is a daily reference rate, published by the Saudi Central Bank (SCB or SAMA), based on the averaged interest rates at which Saudi banks offer to lend unsecured funds to other banks in the Saudi Riyal wholesale money market (or interbank market). On 20 November 2016 Thomson Reuters was approved as the SAIBOR administrator and calculation agent by SAMA.

Scope SAIBOR is the key interbank rate in Saudi Arabia, and the benchmark for commercial and consumer lending rates. It is also known as SIBOR, Saudi Interbank Offered Rate, but can be confused with SIBOR, Singapore Interbank Offered Rate.

Calculation and Tenors Fixing is conducted each business day at 11 AM KSA time. The fixing rate is the average of the contributions excluding the two highest and two lowest contributions for each tenor. As of 20 November 2016 the following tenors are calculated:

Overnight 1 Week 1 Month 3 Months 6 Months 12 Months Previously the 2 Month and 9 Month tenors were calculated but have since been discontinued.

Contributor Banks As of 20 November 2016 the following banks contribute to SAIBOR:

Arab National Bank Bank Aljazira Banque Saudi Fransi AL-AWAL Bank Emirates NBD Gulf International Bank National Bank of Kuwait Saudi National Bank Riyad Bank Saudi British Bank Saudi Investment Bank Alinma Bank Bank Albilad

References

Worked examples

Example 1 — a first encounter with SAIBOR

Start with the simplest possible case. Write down what SAIBOR claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to SAIBOR before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about SAIBOR ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of SAIBOR

In research: SAIBOR appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses SAIBOR in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: SAIBOR is common in secondary-school and first-year university syllabi. It links to neighbouring topics Finance in Saudi Arabia, Interest rates, Reference rates, so understanding it makes those chapters shorter.
In everyday life: Look for SAIBOR outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study SAIBOR in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what SAIBOR means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain SAIBOR out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is SAIBOR in simple terms?

Why does SAIBOR matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study SAIBOR?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on SAIBOR.