Saudi Liquidity Hits SAR 2.824 Trillion in March

Saudi Arabia’s economic liquidity reached a new high of SAR 2.824 trillion at the end of March 2024, marking an annual increase of 8.3% compared to the same period in 2023, according to the Saudi Central Bank (SAMA). The broad money supply (M3) grew by SAR 215 billion year-on-year, reflecting the resilience and strength of the Kingdom’s banking and financial sector. This surge underscores the robust performance of the Saudi economy as it advances toward the goals of Vision 2030.

Context and Background

The liquidity levels of the Saudi economic system have shown consistent growth, with the total money supply (M3) reaching SAR 2,823,745 million by the end of March 2024. This represents a monthly growth of 2.5%, equivalent to SAR 67.553 billion, compared to SAR 2,756,193 million in February 2024. The data, released in SAMA’s statistical bulletin for March, highlights the pivotal role of liquidity in stimulating economic and commercial activity, driving GDP growth, and supporting the objectives of Saudi Vision 2030.

Key Details

Demand deposits remain the largest contributor to the total money supply, accounting for approximately 49.8%. They reached SAR 1,407,114 million, reflecting an annual growth of 3.9% (SAR 52.722 billion) compared to March 2023. On a monthly basis, demand deposits grew by 4.4% (SAR 59.864 billion) from February 2024. Time and savings deposits, the second-largest component at 29.9%, totaled SAR 843.248 billion, with an annual increase of 20.7% (SAR 144 billion). Currency in circulation outside banks contributed 8.1%, amounting to SAR 227.491 billion, up 9.6% annually. Quasi-money deposits accounted for 12.2%, valued at SAR 345.892 billion, including resident foreign currency deposits and repurchase agreements.

Implications and Impact

The sustained growth in liquidity reflects the effectiveness of Saudi Arabia’s monetary policies and the strength of its financial institutions. Increased liquidity facilitates investment, consumption, and business expansion, which are critical for diversifying the economy away from oil dependence. Regionally, this liquidity boost positions the Kingdom as a leading financial hub, attracting foreign investment and fostering economic stability. Internationally, it signals confidence in Saudi Arabia’s economic reforms and its ability to navigate global economic challenges.

Vision 2030 Alignment

This achievement aligns directly with Saudi Vision 2030’s goal of building a diversified and sustainable economy. Enhanced liquidity supports the development of non-oil sectors, empowers small and medium enterprises, and accelerates megaprojects. As the Kingdom continues to implement its transformative agenda, the robust growth in money supply will serve as a cornerstone for achieving long-term prosperity and global competitiveness.

20 Questions

Q1. What was the total liquidity of the Saudi economy at the end of March 2024?

A1. The total liquidity reached SAR 2,823,745 million, or over SAR 2.823 trillion, as reported by the Saudi Central Bank.

Q2. What was the annual growth rate of liquidity in March 2024?

A2. Liquidity grew by 8.3% annually, an increase of SAR 215 billion compared to March 2023.

Q3. What is the broad money supply M3?

A3. M3 is a measure of the total money supply that includes demand deposits, time and savings deposits, currency in circulation, and quasi-money deposits.

Q4. What was the monthly growth of liquidity in March 2024?

A4. Liquidity increased by 2.5% monthly, equivalent to SAR 67.553 billion, from February 2024.

Q5. Which component contributed most to the money supply?

A5. Demand deposits were the largest contributor, accounting for about 49.8% of the total money supply.

Q6. What was the value of demand deposits at the end of March 2024?

A6. Demand deposits reached SAR 1,407,114 million, with an annual growth of 3.9%.

Q7. How did time and savings deposits perform annually?

A7. They grew by 20.7% annually, reaching SAR 843.248 billion, or 29.9% of the total money supply.

Q8. What was the contribution of currency in circulation outside banks?

A8. Currency in circulation contributed 8.1% to the total money supply, totaling SAR 227.491 billion.

Q9. What are quasi-money deposits?

A9. Quasi-money deposits include resident deposits in foreign currencies, deposits for documentary credits, existing transfers, and repurchase agreements.

Q10. What was the value of quasi-money deposits?

A10. Quasi-money deposits accounted for 12.2% of the total, valued at SAR 345.892 billion.

Q11. How does liquidity growth benefit the Saudi economy?

A11. It stimulates economic and commercial activity, supports GDP growth, and contributes to the objectives of Saudi Vision 2030.

Q12. What does the surge in M3 indicate about the banking sector?

A12. It highlights the resilience and strength of the Saudi banking and financial sector.

Q13. How did demand deposits change monthly?

A13. Demand deposits grew by 4.4% monthly, an increase of SAR 59.864 billion from February 2024.

Q14. What was the annual growth of currency in circulation?

A14. Currency in circulation grew by 9.6% annually, an increase of SAR 19.938 billion.

Q15. What was the monthly growth of time and savings deposits?

A15. They grew by 0.6% monthly, an increase of over SAR 4 billion from February 2024.

Q16. How does liquidity support Vision 2030?

A16. It enables investment in non-oil sectors, fosters economic diversification, and supports megaprojects and SMEs.

Q17. What was the liquidity level in March 2023?

A17. In March 2023, liquidity stood at SAR 2,608,319 million.

Q18. What was the monthly growth of currency in circulation?

A18. Currency in circulation outside banks grew by 4.4% monthly, an increase of SAR 9.514 billion.

Q19. What role does SAMA play in this context?

A19. SAMA monitors and reports monetary statistics, ensuring stability and confidence in the financial system.

Q20. How does this liquidity growth impact Saudi Arabia’s global standing?

A20. It enhances the Kingdom’s attractiveness to foreign investors and reinforces its position as a leading economic power in the region.

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