Historic Liquidity Growth: By the end of Q2 2024, Saudi Arabia's liquidity reached a record high of SAR2.898706 trillion, reflecting a 9% year-over-year growth and a 5.5% increase since the beginning of the year.
Major Components Breakdown: The broad money supply (M3) for Q2 2024 consisted of demand deposits (49%), time and savings deposits (31%), other quasi-monetary deposits (12%), and currency in circulation (8%).
Economic Impact: The robust liquidity levels are driving positive trends in economic and commercial sectors, enhancing the Kingdom's financial stability and supporting overall economic development.
Riyadh, September 10, 2024 — The Saudi economy has reached a remarkable milestone in liquidity, with available funds demonstrating a year-over-year growth rate of 9%. By the close of the second quarter (Q2) of 2024, total liquidity surged to SAR2.898706 trillion, marking an unprecedented high, according to the Saudi Central Bank (SAMA) statistical bulletin for July.
During Q2 2024, liquidity expanded by SAR238.15 billion from SAR2.660556 trillion reported in the same period of 2023, highlighting a significant increase in broad money (M3). On a quarterly basis, liquidity saw a growth of 3%, or SAR74.96 billion, from SAR2.823745 trillion at the end of the first quarter (Q1) of 2024.
Since the beginning of the year, liquidity has grown by 5.5%, reflecting an increase of over SAR148.83 billion from SAR2.720957 trillion at the end of January, culminating in SAR2.869788 trillion by the end of July. These robust liquidity levels are playing a pivotal role in bolstering the economic and commercial frameworks of the Kingdom, contributing to positive trends in economic development.
A detailed analysis of the broad money supply (M3) components for Q2 2024 reveals the following:
Demand Deposits: Accounting for the largest share at 49%, demand deposits totaled SAR1.421423 trillion. These deposits, which are readily accessible for transactions, represent the most liquid component of the money supply.
Time and Savings Deposits: The second largest component, contributing 31% to the total, amounted to SAR903.712 billion. These deposits, which are less liquid but offer interest, reflect savings held over time.
Other Quasi-Monetary Deposits: Comprising 12% of the total, these deposits reached SAR344.384 billion. This category includes deposits in foreign currencies, those secured by letters of credit, ongoing transfers, and repurchase agreements (repos) with the private sector.
Currency in Circulation: With a value of SAR229.187 billion, this represents about 8% of the total liquidity. It includes physical cash in circulation outside the banking system.
Quasi-money deposits encompass a range of financial instruments, including residents' foreign currency deposits, deposits backed by letters of credit, and ongoing transfers, as well as repos conducted by banks with private sector entities.
Domestic liquidity is segmented into three primary categories:
M1: Includes currency in circulation outside banks and demand deposits, representing the most liquid form of money.
M2: Expands on M1 by adding time and savings deposits, capturing a broader measure of money that includes less liquid assets.
M3: Encompasses M2 along with other quasi-money deposits, providing a comprehensive measure of the money supply that includes all types of deposits and cash.
This comprehensive view of Saudi Arabia’s liquidity highlights the Kingdom's strong economic fundamentals and its capacity to support sustained growth and stability within the financial sector.