RIYADH: According to official data, Saudi Arabia’s money supply increased by 9% annually to SR2.97 trillion ($791 billion) in January. Demand deposits, which totaled SR1.45 trillion, made up 48.75 percent of the total, according to data from the Saudi Central Bank, or SAMA. They somewhat increased from 48.42 percent a year earlier, suggesting changing monetary conditions, although they are still below the April 2021 top of 60.21 percent.
An essential component of the money supply is demand deposits. The total amount of demand deposits rises when people make deposits into checking accounts, increasing the economy’s total money supply. Money kept in a bank account that is available for withdrawal anytime the account holder needs it is known as a demand deposit. Usually, daily expenses are covered by these cash. Generally speaking, banks and other financial organizations pay little or no interest on the amount in a demand deposit account.
Due to the riyal’s linkage to the US dollar, time and savings deposits, which increased during the US Federal Reserve’s aggressive rate hikes and were reflected in Saudi Arabia, reached SR985.03 billion in January, or 33.21 percent of total deposits. Time deposits began to fall from their November peak of 33.61 percent as the Fed eased monetary policy in September, bringing interest rates down from their peak of 6 percent to 5 percent by December.
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