Saudi Arabia money supply surged to $832 billion, driven by strong growth in time and savings deposits. As a result, income-generating accounts now reach SR1.1 trillion, marking the highest share of Saudi Arabia money supply in 16 years. This trend shows growing investor confidence in the Kingdom’s banking sector.
Demand deposits, or non-interest-bearing checking accounts, remain the largest portion at nearly 48 percent, totaling SR1.49 trillion. However, savings accounts grew faster, rising 21.71 percent compared with a 5.2 percent increase in demand deposits. Consequently, time deposits attract more attention due to their attractive yields, influencing Saudi Arabia money supply composition.
Other quasi-monetary instruments, including residents’ foreign currency deposits, remittances, letters of credit, and repo placements, represent about 9 percent of Saudi Arabia money supply. Yet, this category dropped by 18.54 percent to SR280.54 billion. Meanwhile, currency outside banks, although the smallest component at 7.83 percent, increased 6.6 percent to SR244.31 billion.
Time deposits surged because global monetary tightening and relatively high yields make fixed-term accounts appealing. After previously peaking at 6 percent, the Saudi Central Bank gradually reduced its repo rate to 5 percent. Despite the cuts, rates remain attractive compared with prior low-rate periods. Consequently, banks promote time deposits to attract liquidity, boosting Saudi Arabia money supply.
Strong lending growth, particularly in Vision 2030-related sectors, mortgage financing, and corporate borrowing, outpaced deposit inflows. Therefore, banks face increased funding needs and expanded offerings on time deposits. Additionally, banks issued bonds, syndicated loans, and certificates of deposit to secure liquidity.
Net foreign assets turned negative, highlighting rising external borrowing. In response, the Saudi Central Bank implemented a 100-basis-point countercyclical capital buffer and tightened loan-to-value and debt burden rules. These steps aim to strengthen financial stability while supporting Saudi Arabia money supply growth.
Analysts expect continued growth in time and savings deposits. Banking surveys show that deposits rebounded, led by an 8.1 percent increase in time deposits following seasonal dips. Fitch Ratings predicts lending growth of 12–14 percent, led by corporate demand, to outpace deposit growth. Consequently, banks may issue more than $20 billion in debt this year, emphasizing non-deposit funding.
In short, Saudi Arabia money supply growth and rising time deposits highlight strong banking sector dynamics. Moreover, these trends show that banks adapt quickly to higher lending demand, attractive yields, and regulatory reforms. Investors continue to favor income-generating accounts, ensuring Saudi Arabia remains a key regional financial hub.
