Liquidity levels or available money in Saudi Arabia’s economy has experienced robust growth, reaching a historic high of SAR3.033 trillion ($807.9 billion) by the end of February 2025.
According to the Saudi Central Bank (SAMA) monthly statistical bulletin, liquidity recorded an annual increase of SAR277.49 billion, representing a growth rate of 10.1 percent from SAR2.756 trillion in February 2024.
Monthly liquidity levels in Saudi Arabia grew by SAR67.543 billion, a 2.3 percent increase compared to the end of January of this year, when levels stood at SAR2.966 trillion. Such liquidity levels drive and support economic and trade ecosystems and contribute to growth rates in the economic development trajectory.
Demand deposits hit SAR1.47 trillion
Examining the four components of the broad money supply (M3), demand deposits constituted the largest share, accounting for 48.5 percent or SAR1.47 trillion at the end of February. Meanwhile, time and savings deposits followed, contributing 34 percent with a value of SAR1.031 trillion.
Quasi-cash deposits accounted for 9.7 percent of the total money supply, reaching SAR293.683 billion. Quasi-cash deposits encompass residents’ deposits in foreign currencies, deposits secured by letters of credit, ongoing transfers, and repurchase agreements (repos) conducted by banks with the private sector.
In addition, currency in circulation outside banks came last, contributing 7.8 percent with a value of SAR237.905 billion.
Domestic liquidity comprises money supply M1, which includes currency in circulation outside banks along with demand deposits exclusively; money supply M2, consisting of M1 plus time and savings deposits; and broad money M3, encompassing M2 along with other quasi-cash deposits.
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Lending to see double-digit growth in 2024
In a recent report, Fitch expected lending growth of 12-14 percent in 2025, driven by Saudi Arabia’s corporate segment. Lending growth is likely to continue exceeding deposit growth, with banks further increasing their non-deposit funding.
“We expect Saudi bank debt issuance to exceed $20 billion in 2025. This, together with further CASA dilution and competition for funding, will dampen the positive impact of lower interest rates on net interest margins,” added Fitch.
The rating agency added that Saudi banks’ performance metrics, particularly net interest margins, will see only limited improvement from the interest rate cuts that began in 2024 due to the prolonged tightening of liquidity conditions and strong competition for funding.
A sharp drop in oil prices could further tighten liquidity in Saudi Arabia, but the central bank may intervene if liquidity shortages restrict banks’ ability to meet demand for financing.
