Bank claims on the private sector, a key indicator of lenders’ confidence in the economy, stood at 728.84 billion riyals last month last month, inching up from 728.7bn riyals in June, according to data published by the Saudi Arabian Monetary Agency (Sama) yesterday.
In terms of annual growth, bank claims on the private sector slowed to 3.6pc last month, down from 5.6pc in June.
M3 stood at 1.01 trillion riyals ($ 269.7bn) last month compared to 1trn riyals in June, when its annual growth reached 16.4pc. In July last year, money supply stood at 877.1bn riyals. M3 is the broadest measure of money circulating in the economy.
Last month coincided with the summer holiday which sees hundreds of thousands of Saudi holidaymakers withdraw substantial sums of money before travelling.
Banks have been more risk-averse since September last year as the global economic slowdown hit demand on private sector output, especially petrochemicals, and as problems encountered by two private conglomerates heightened lenders’ perception of risk.
The fact that oil has been trading for much of the year above the Saudi budget’s break-even price of $ 36-$ 40 per barrel suggests the Saudi banking system will not face any liquidity shortages.
Banks increased their deposits with the central bank to 128.6bn riyals in July, up from 118.5bn riyals in the previous month and 87.1bn riyals in July, last year.
Demand deposits, or total amount of deposits in current accounts, rose to 403.1bn riyals last month, up from 390.6bn riyals in June and 349.1bn riyals in July last year.
Sama’s net foreign assets stood at 1.43trn riyals last month, which is their lowest level since June last year. They stood at 1.46trn riyals in June this year and 1.50trn riyals in July last year.
The drop was mainly due to withdrawals by Sama on its deposits with banks abroad, the second-largest component of its net foreign assets. The biggest component, investments in foreign securities, inched down 0.4pc last month compared to June.
