Saudi Arabia’s M3 money supply rises 6.9% since Dec. 31

The SAMA data also revealed that the money supply in Saudi Arabia had seen an uptick in the last two weeks after dropping to SR2.62 billion in the week ending Jun. 22. (Shutterstock)

RIYADH: Saudi Arabia’s M3 money supply has surged 6.94 percent to SR2.67 billion ($710 million) in the week ending July 6, up from SR2.5 billion on Dec. 31, according to data released by the Saudi Central Bank, also known as SAMA.
The M3 — the broadest measure of liquidity in the monetary system — went up 0.39 percent to SR2.66 billion in the week ending June 29 compared to the preceding week.
The SAMA data also revealed that the money supply in Saudi Arabia had seen an uptick in the last two weeks after dipping to SR2.62 billion in the week ending June 22.
Generally, central banks use M3 figures to direct monetary policy, thereby controlling inflation, consumption, growth, and liquidity over medium- and long-term periods.
In fact, M3 in Saudi Arabia averaged SR1.01 trillion from 1993 until 2023, reaching an all-time high of SR2.62 trillion in April 2023 and a record low of SR228 billion in January 1993, according to data firm Trading Economics.
Meanwhile, the M2 money supply recorded a 7.15 percent rise in the week ending July 6 compared to Dec. 31.
The M2 is a measurement of the nation’s money supply that estimates all the cash individuals have in hand or short-term bank deposits. It is usually used to indicate possible increases or decreases in inflation levels.
Meanwhile, the M1 money supply, comprising currency, demand and other liquid deposits, rose 2.36 percent in the week ending July 6 compared to the end of December 2022.
The M1 money supply contains currency and assets that can be quickly converted to cash.
According to Riyad Capital's Saudi Economic Chartbook for the second quarter of 2023, the growth of the money supply aggregates M2 and M3 accelerated year on year to 8.2 percent and 10 percent in March due to a corresponding rise in banks’ customer deposits to 10.8 percent.
Additionally, private sector credit growth slowed year on year to 10.3 percent due to lower mortgage and personal loan growth. Credit growth also aligned with customer deposit growth for the first time in more than three years.