Saudi Arabia's Financial Reserves Surge To An Unprecedented SAR 2.825 Trillion

Saudi Arabia's liquidity levels saw significant growth, reaching SAR2,825,715 million by the end of May 2024. This marks an annual increase of about 8.6%, up from SAR2,602,786 million in May 2023. The data comes from the Saudi Central Bank (SAMA)'s monthly statistical bulletin for May 2024.

The broad money supply (M3) is composed of several key elements. Demand deposits, which are the largest part at 49.2%, reached SAR1,390,893 million by the end of May 2024. Time and savings deposits followed as the second-largest component at 31.5%, amounting to SAR889,558 million.

Other quasi-money deposits contributed approximately 11.1% to M3, totalling SAR314,807 million. Lastly, "currency in circulation outside banks" accounted for around 8.2%, with a value of SAR230,456 million.

Since January 2024, liquidity has grown by 4%, representing an increase of more than SAR104,757 billion from SAR2,720,957 million at the start of the year. On a monthly basis, liquidity rose by about 1.2%, increasing by approximately SAR32,402 billion compared to April's end figure of SAR2,793,313 million.

This steady rise in liquidity levels supports economic and commercial activities significantly. It also plays a crucial role in achieving the objectives set out in Saudi Vision 2030.

Breakdown of Quasi-Money Deposits

Quasi-money deposits include residents' deposits in foreign currencies and deposits against letters of credit. They also encompass outstanding transfers and repurchase agreements (repos) conducted by banks with the private sector.

The broad definition of domestic liquidity includes M1 and M2 categories. M1 consists of currency in circulation outside banks plus demand deposits only. M2 includes M1 along with time and savings deposits.

The strength and stability of Saudi Arabia's banking and financial sector are evident through these growing liquidity levels. This growth reflects positively on economic development processes within the country.

These liquidity levels are crucial for supporting economic activities and achieving long-term goals like those outlined in Saudi Vision 2030.

With inputs from SPA