RIYADH: According to official figures, the total deposits held by Saudi banks in February came to SR2.54 trillion ($677 billion), a rise of 10.26 percent over the same month the previous year. Analysis of the Saudi Central Bank’s data revealed that the main drivers of growth were a 26 percent yearly rise in time and savings deposits, which totaled SR838.53 billion. During this time, demand reserves rose by 2.85 percent to SR1.25 trillion, while other quasi-money expanded by 7.57 percent to SR352 billion.
The most significant portion comprises demand deposits, which comprise 53% of all deposits, somewhat less than 57% a year ago. This change is the result of term reserves becoming more and more popular as a result of rising interest rates, which attracts clients looking for higher income-producing holdings. On the other hand, term deposits saw a monthly decline of 3%, which was the first decline in 18 months.
During this time, term deposits were becoming more and more popular because to the growing interest rates, which were rising in line with the US Federal Reserve’s rates as part of recent monetary policy efforts to fight inflation. However, given the Fed’s decision to keep rates constant at their most recent meeting in March, this increasing trend seems to end.
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