The Amount of Money in Saudi banks Increased 8% in March to $753 Billion

The Amount of Money in Saudi banks Increased 8% in March to $753 Billion

RIYADH: According to official data, the money supply in Saudi banks increased by 8% in March compared to the same month the previous year, reaching SR2.82 trillion ($753 billion).

The increase was primarily driven, according to data released by the Saudi Central Bank, or SAMA, by a roughly 21% increase in banks’ term and savings accounts, which reached SR843.25 billion. After demand deposits, which made up 50% of the total money supply at SR1.41 trillion, these deposits made up the second-largest portion, or 30%.

The increase in term deposits was influenced by several variables. First off, people and organizations have been encouraged to use these accounts in search of higher returns due to the Kingdom’s high-interest rate environment, which has been influenced by the US Federal Reserve’s anti-inflationary monetary policy.

Furthermore, the rise in accounts owned by organizations with ties to the government was a major factor. According to Fitch Ratings, these organisations decided to direct their excess liquidity into term deposits with commercial banks, which increased the accounts’ growth trajectory.In July 2023, the bank raised its repo rate by 25 basis points to 6 percent, the highest since 2001. The rates haven’t changed since then.

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