SAMA’s net foreign assets remain virtually unchanged at $435.5bn
Growth in Saudi Arabia’s liquidity slows to 7.8 percent year-on-year in May, central bank data shows
Net foreign assets of
Saudi Arabia’s central bank remained virtually unchanged at the end of May, standing at SR1.63 trillion ($435.5 billion), according to a monthly statistical bulletin from the Kingdom’s regulator.
The figure represents an increase of just SR289 million from April for the bank, also known as SAMA.
The institution’s total assets grew in May by SR19.2 billion to reach SR1.86 trillion.
In April, those assets grew by 1 percent, according to data published on the bank’s website on June 28.
SAMA’s deposits with banks abroad and miscellaneous assets increased by SR17.4 billion and SR12.5 billion, respectively, while the central bank’s investment in foreign securities fell by SR13.4 billion to
SR1.101 trillion over the same period.
Liquidity
Saudi Arabia’s M3 monetary aggregate, known as “broad money,” grew in May by SR171.6 billion ($45.7 billion) from the same month a year ago to SR2.38 trillion.
M3 money supply, a benchmark indicator for liquidity in Saudi Arabia’s monetary system, increased by 7.8 percent from SR2.21 trillion in May last year, according to SAMA data.
The annual growth rate in May was the slowest since December 2021. It slowed from 8.7 percent in April.
Looking at the year-on-year changes in components of the M3 aggregate, time and saving deposits grew by SR78.3 billion to SR517.4 billion. Other quasimoney deposits and demand deposits increased by SR60 billion and SR38.8 billion to SR297.8 billion and SR1.36 trillion, respectively. Currency outside banks decreased by SR5.6 billion to SR206.6 billion over the same period.
The M3 money supply slipped 0.5 percent from its level in April.
Relief to lenders
The Saudi Central Bank’s SR50 billion cash injection has brought immediate relief to commercial lenders in the Kingdom, according to a Bloomberg report.
SAMA made this move as banks in the Kingdom are faced with the worst liquidity crunch in over a decade, the report added.
Amid the temporary relief, a Bloomberg Intelligence report estimates that lenders still need to raise about SR160 billion to finance bigger loan books.
“Banks still must diversify funding. SAMA’s aid just delays a fix,” said Edmond Christou, a senior analyst at Bloomberg Intelligence. The latest injection from the central bank has already started showing its impact as the Saudi Arabian Interbank Offered Rate, also known as SAIBOR, fell by about 17 basis points from Friday to 3.13 percent on Sunday, the report added.
Moreover, banks included in the Saudi exchange Tadawul climbed as much as 1.4 percent on Monday, before closing down at 0.3 percent.
People familiar with the matter told Bloomberg that funding from the central bank came in at least three separate tranches, with the first and second injections consisting of three-month deposits amounting to SR15 billion each.
SAMA made one more placement in recent days that included both shorter and longer maturities, the people who wished to remain anonymous added.