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8.6pc ANNUAL GROWTH

Saudi Arabia's liquidity soars to hit all-time high of $752bn

RIYADH, 16 days ago

Saudi Arabia's liquidity levels continued to grow strongly, reaching SAR2.826 trillion ($752 billion) at the end of May, thus marking an annual growth of approximately 8.6%. This represented an increase of more than SAR222.9 billion ($59.3 billion) compared to the same period last year, which stood at SAR2.6 trillion, reported SPA.
 
These levels reflect the broad money supply (M3), stated the report citing the Saudi Central Bank (SAMA)'s monthly statistical bulletin for May.
 
Since the beginning of 2024, liquidity has grown by 4%, representing an increase of more than SAR104,757 billion. At the end of January, it stood at SAR2,720,957 million.
 
SAMA said the kingdom's liquidity levels also achieved a monthly growth of approximately 1.2%, with an increase of about SAR32,402 billion compared to the end of April of the same year when it stood at SAR2,793,313 million.
 
These liquidity levels strongly support economic and commercial activity, contributing effectively to the economic development process and enabling the achievement of the goals of Saudi Vision 2030. This reflects the strength and solidity of the banking and financial sector, it added.
 
A breakdown of the four components of the broad money supply (M3) is as follows: Demand deposits, the largest contributor to the total money supply (M3) at 49.2%, recorded a level of SAR1,390,893 million at the end of May 2024, said the SAMA data. 
 
Time and savings deposits, the second-largest contributor to the total money supply (M3) at 31.5%, recorded a level of SAR889,558 million. Other quasi-money deposits amounted to SAR314,807 million, representing a contribution of approximately 11.1% to the total money supply (M3), making it the third-largest contributor. 
 
Lastly, currency in circulation outside banks" amounted to SAR230,456 million, contributing approximately 8.2% to the total money supply (M3), it stated.
 
It is important to note that quasi-money deposits consist of residents' deposits in foreign currencies, deposits against letters of credit, outstanding transfers, and repurchase agreements (repos) conducted by banks with the private sector, said the SAMA data.
 
Domestic liquidity includes M1, which comprises currency in circulation outside banks in addition to demand deposits only, and M2, which includes M1 plus time and savings deposits. The broad definition, M3, includes M2 plus other quasi-money deposits, it added.



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