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Economic Overview
Money Supply Responds Favorably
Money Supply
» Owing to rising inflation, the reserve requirement on total demand deposits was increased from 7% in
Nov 07 to 13% till May 08. Although the requirement was relaxed later in 2008, the move delivered the
desired results.
» The annual M3 growth dropped from 21.8% in Aug 08 to 19.4% in Sep 08. On MoM basis, M2 growth
of 2.8% in Jul 08 reduced to 0.2% in Oct 08, while M3 increase of 1.9% in Jul 08 declined to 1.4% in
Oct 08.
Money Supply
End of period 2005 2006 2007 2008
(All figures in SR bn) Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Currency in Circulation (1) 64.3 69.3 72.2 71.4 70.8 72.4 71.4 74.4 77.6 78.6 76.9 84.3 81.9
Demand Deposits (2) 219.3 243.4 311.4 326.8 328.3 339.3 337.0 344.4 351.6 349.1 342.3 333.6 335.8
Money Supply (M1) (3) = (1) +(2) 283.5 312.7 383.6 398.2 399.1 411.7 408.4 418.9 429.2 427.7 419.2 417.9 417.6
% growth rate 4.51 10.3 22.6 3.8 0.2 3.2 -0.8 2.6 2.5 -0.3 -2.0 -3.0 -0.1
Time & Savings Deposits (4) 165.3 226.0 283.1 290.8 293.0 294.1 290.8 284.0 282.8 304.4 318.4 326.5 327.9
Money Supply (M2) (5) = (3) +(4) 448.8 538.8 666.6 689.0 692.1 705.8 699.2 702.9 711.9 732.1 737.6 744.4 745.5
% growth rate 10.0 20.0 23.7 3.4 0.5 2.0 -0.9 0.5 1.3 2.8 0.8 0.9 0.2
Other Quasi Monetary Deposits (6) 104.9 121.8 123.1 126.1 135.2 128.2 127.0 141.6 148.8 145.0 148.2 144.0 155.5
Money Supply (M3) (7) = (5) +(6) 553.7 660.6 789.8 815.1 827.4 834.0 826.2 844.4 860.7 877.1 885.8 888.5 901.1
% growth rate 11.6 19.3 19.6 3.2 1.5 0.8 -0.9 2.2 1.9 1.9 1.0 0.3 1.4
Source: SAMA
Global Investment House
Saudi Arabia Economic Overview - January 2009