Saudi banks witness unprecedented savings growth, lending expansion
Business
The most notable increase was observed in time and savings accounts
RIYADH (Web Desk) - Saudi citizens exhibited a remarkable surge in their savings habits in August, achieving the highest savings rate in over a decade, according to data released by the Kingdom’s central bank, also known as SAMA.
Saudi Arabia’s money supply expanded by 10 percent compared to the same period the previous year, marking the most substantial annual growth since August 2014.
The money supply encompasses currency outside banks, demand deposits, time and savings deposits, and other quasi-money deposits.
The most notable increase was observed in time and savings accounts, which soared by 54.17 percent compared to August the previous year, based on figures compiled by Arab News.
This is also seen as an unparalleled yearly expansion for this account category.
“Time deposits typically offer more attractive interest rates compared to demand deposits,” Mazen Al-Sudairi, head of research at Al Rajhi Capital, told Arab News.
“In an environment of rising interest rates, individuals and businesses may find time deposits appealing as they provide an opportunity to earn higher returns on their savings over the deposit period,” he added.
Time deposits surged to SR809 billion ($215.66 billion) in August, marking a substantial rise from the SR525 billion recorded in the same month the prior year.
Notably, the proportion of time deposits within the total money supply reached its highest level in more than a decade.
The percentage share of time deposits within the overall money supply stood at 30.27 percent in August, whereas demand deposits accounted for 49.32 percent of the total.
Comparing these figures to the same period the previous year, time deposits represented only 21.5 percent share of total money supply, while demand deposits were at 57.2 percent.
