In the latest confirmation of Saudi Arabia's rapidly deteriorating financial situation, having recently sacked 16,000 foreign workers, earlier today the Ministry of Islamic Affairs announced it has terminated the services of 10,000 substitute imams to save 360 million Saudi Riyals, or less than $100 million, the Saudi Gazette reported. The ministry gave the substitute imams the option to either transfer to the position of a full-time imam leading five prayers a day at a mosque or to leave their job all together.

“Many criticized the role of substitute imams claiming they do not do anything useful. Substitute imams receive a salary of SR3,000 a month. The ministry is changing the job title and description of substitute imams to cooperative preacher. Cooperative preachers are responsible for giving sermons when needed,” said the source. The Gazette's source also said cooperative preachers must have a bachelor’s degree in Islamic Studies.

“The cooperative preacher will receive monetary compensation and reward for his services. He will follow the rules and regulations of a full-time and official preacher. Substitute imams, imams and preachers have the option to also become full-time imams and part-time preachers,” said the source, adding that those who do not wish to be imams will be cooperative preachers assigned to a mosque.

Qassim Ministry of Islamic Affairs Public Relations Director Badr Al-Batty said the ministry has already terminated the service of Friday sermons in Qassim.

“Many have complained about the termination of the service of substitute imams claiming there will be a shortage of imams. People raised the question of what will happen when full-time imams are on their annual leave,” said Al-Batty. He also said people pointed out that the number of mosques is growing and the need for more imams is rising.

“The ministry’s changes in the title and job of its employees is applied to all areas of the Kingdom. The ministry has a strict criteria to assign imams to different mosques. The imams must be qualified for their positions and must also be likable by the worshipers of the mosques,” said Al-Batty.

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However, the most important, and most troubling, indicator of the precarious Saudi financial situation, and one which continues to be largely ignored by the media, remains the interbank rates charged by banks in Saudi Arabia. As shown in the chart below, 3M interbank lending rates have soared in the past year, and are now at levels not seen since the financial crisis. As noted previously, should this indicator of increasingly tighter financial conditions continue to rise relentlessly, it suggests that a banking crisis - absent some external bailout - appears increasingly inevitable, and if anything may be the best indicator whether and when Saudi Arabia will finally fold, and do something unexpected vis-a-vis oil supply to push the price of crude sharply higher.