Saudi Arabia’s liquidity hits record highs of $753 billion

Dubai: Saudi Arabia's liquidity levels showed robust growth, reaching $746 million (Dh2.7 billion) by the end of May 2024, marking an annual increase of about 8.6 per cent.

Year-to-date, liquidity expanded by 4 per cent, rising to $27 billion (Dh99 billion) at the start of January. Monthly, liquidity saw a 1.2 per cent increase at the end of April 2024.

These liquidity levels play a crucial role in bolstering economic and commercial activities, thereby supporting Saudi Vision 2030's development goals. They underscore the resilience of the banking and financial sector.

The Saudi Vision 2030, which is a programme launched by the government in 2016, with the main aim of diversifying its economy away from the oil sector. It has three main pillars - a vibrant society, a thriving economy, and an ambitious nation.

Breaking down the components of the broad money supply (M3), demand deposits, contributing 49.2 per cent. Time and savings deposits, contributing 31.5 per cent. Other quasi-money deposits contributing 11.1 per cent of M3. Currency in circulation outside banks amounted to 8.2 per cent to M3.

Quasi-money deposits comprise residents' foreign currency deposits, deposits against letters of credit, outstanding transfers, and repos conducted by banks with the private sector.

Domestic liquidity encompasses M1 (currency in circulation and demand deposits) and M2 (M1 plus time and savings deposits), while M3 includes M2 and other quasi-money deposits.