Business | Economy
Saudis feel credit strain despite money supply rise
Annual growth in the Saudi money supply rose for the first time in three months in August but the Arab world's largest economy is beginning to feel strains of a liquidity squeeze, central bank data showed on Sunday.
- Reuters
- Published: 23:25 October 5, 2008
Riyadh: Annual growth in the Saudi money supply rose for the first time in three months in August but the Arab world's largest economy is beginning to feel strains of a liquidity squeeze, central bank data showed on Sunday.
The annual growth of money supply, an indicator of future inflation, reached 21.8 per cent in August, up from 20.85 per cent in July, according to monthly data released by the Saudi Arabian Monetary Agency. M3, the broadest measure of money circulating in the economy, hit 885.77 billion riyals (Dh865 billion) at the end of August, compared with 727.15 billion riyals a year earlier, SAMA said.
Annual inflation eased off from a peak of at least 30 years to 10.9 per cent in August, compared to 11.1 per cent in July. Demand deposits, the largest component of M3, recorded a 1.95 per cent month-to-month fall in August, its strongest decline in at least a year.
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