Liquidity levels, which refer to the money available within the Saudi economy, have seen strong growth, reaching a peak at the end of May 2024 at 2,825,715 million riyals (approximately 753.3 billion dollars). Annual liquidity growth is estimated at 8.6 percent, with an increase exceeding 222,928 million riyals compared to the end of the same period in 2023, where it stood at 2,602,786 million riyals. This reflects broad and comprehensive money supply levels (M3), according to the data from the monthly statistical bulletin of the Saudi Central Bank for May 2024.
Liquidity has grown since the beginning of the year by 4 percent, translating to an increase of over 104,757 million riyals, as it was at 2,720,957 million riyals at the end of January. Moreover, monthly liquidity growth is estimated at 1.2 percent, with an increase of approximately 32,402 million riyals, compared to the end of April of the same year, where it was at 2,793,313 million riyals. These liquidity levels serve as a support for economic and commercial activity, actively contributing to the economic development process in Saudi Arabia, and enabling the achievement of the objectives of the Kingdom's Vision 2030, reflecting the robustness and strength of the banking and financial sector.
Examining the four components of the money supply (M3) in its broad and comprehensive sense; demand deposits, which are the largest contributor to the total money supply (M3), accounted for 49.2 percent, amounting to 1,390,893 million riyals at the end of May 2024. Time and savings deposits reached 889,558 million riyals, making them the second largest contributors to the total money supply (M3) at 31.5 percent. Other quasi-cash deposits amounted to 314,807 million riyals, contributing approximately 11.1 percent to the total money supply (M3), making them the third largest contributors. Lastly, currency in circulation outside banks was valued at 230,456 million riyals, contributing about 8.2 percent to the total money supply (M3).
It is noted that quasi-cash deposits include deposits by residents in foreign currencies, deposits against documentary credits, existing transfers, and repurchase agreements (repos) executed by banks with the private sector. Additionally, local liquidity includes M1, which encompasses currency in circulation outside banks plus demand deposits only, and M2, which includes M1 plus time and savings deposits, while the broad definition (M3) includes M2 plus other quasi-cash deposits.
