Saudi Arabia's Liquidity Surges To SAR 2.906 Trillion By End Of August 2024

The Saudi economy's available funds, or liquidity, have shown a significant year-over-year increase. By the end of August 2024, liquidity rose by 8.7% to SAR 2,906,636 million (over SAR 2.906 trillion), compared to SAR 2,674,476 million (over SAR 2.674 trillion) in August 2023. This data is part of the Saudi Central Bank's (SAMA) monthly statistical bulletin for August 2024.

Liquidity levels also experienced a monthly growth of approximately 1.3%, with an increase of about SAR 36.848 billion from the end of July 2024 when it was at SAR 2,869,788 million (over SAR 2.869 trillion). From January to August this year, liquidity grew by 6.8%, rising over SAR 185.678 billion from SAR 2,720,957 million (over SAR 2.72 trillion).

The broad money supply (M3) consists of four main components. Demand deposits are the largest contributor at 49.5%, amounting to SAR 1,437,365 million (over SAR 1.437 trillion) by the end of August. Time and savings deposits follow as the second-largest contributor at 32%, totaling SAR 929.659 billion.

Other quasi-monetary deposits make up the third major component of M3 at an estimated rate of 10.8%, reaching SAR 313.220 billion by the same period. Currency in circulation outside banks accounts for about 7.8% of the total, standing at SAR 226.392 billion.

Quasi-money deposits include various financial instruments such as residents' foreign currency deposits and those secured by letters of credit or ongoing transfers. Additionally, they encompass repurchase agreements (repos) conducted by banks with private sector entities.

Domestic liquidity is categorized into three segments: M1 includes currency in circulation outside banks and demand deposits; M2 comprises M1 plus time and savings deposits; and M3 encompasses M2 along with other quasi-money deposits.

The robust liquidity levels observed contribute positively to economic and commercial activities within Saudi Arabia's economy, supporting favorable growth rates in economic development processes.

With inputs from SPA