Saudi Arabia's Liquidity Reaches An All-Time High Of SAR2.825 Trillion In May 2024

Saudi Arabia's liquidity levels reached SAR2,825,715 million by the end of May 2024, showing an annual growth of about 8.6%. This marks an increase of over SAR222,928 billion compared to May 2023, when it was SAR2,602,786 million. The figures reflect the broad money supply (M3) as detailed in the Saudi Central Bank (SAMA)'s monthly statistical bulletin for May 2024.

Demand deposits, which are the largest part of the total money supply (M3), accounted for 49.2% and stood at SAR1,390,893 million at the end of May 2024. Time and savings deposits followed as the second-largest contributor at 31.5%, recording a level of SAR889,558 million. Other quasi-money deposits amounted to SAR314,807 million, representing around 11.1% of the total money supply (M3). Lastly, "currency in circulation outside banks" contributed approximately 8.2%, amounting to SAR230,456 million.

Since January 2024, liquidity has grown by 4%, increasing by more than SAR104,757 billion from its level of SAR2,720,957 million at the end of January. Monthly growth also showed a rise of about 1.2%, with an increase of approximately SAR32,402 billion compared to April's end figure of SAR2,793,313 million.

The rising liquidity levels significantly support economic and commercial activities in Saudi Arabia. This growth contributes effectively to economic development and helps achieve the goals set out in Saudi Vision 2030. It also highlights the strength and stability of the country's banking and financial sector.

Quasi-money deposits include residents' deposits in foreign currencies, deposits against letters of credit, outstanding transfers, and repurchase agreements (repos) conducted by banks with the private sector. Domestic liquidity comprises M1 (currency in circulation outside banks plus demand deposits) and M2 (M1 plus time and savings deposits). The broad definition M3 includes M2 plus other quasi-money deposits.

The breakdown of these components shows how different types of deposits contribute to the overall money supply in Saudi Arabia. Understanding these components is crucial for analysing economic trends and making informed financial decisions.

The continuous growth in liquidity levels reflects positively on Saudi Arabia's financial health and its ability to sustain economic progress. These developments are essential for fostering a stable economic environment conducive to achieving long-term national objectives.

With inputs from SPA