Annual growth in the Saudi money supply rose for the first time in three months in August but the Arab world's largest economy is beginning to feel strains of a liquidity squeeze, central bank data showed yesterday.Annual inflation eased off from a peak of at least 30 years to 10.9 per cent in August, compared to 11.1pc in July.
The annual growth of money supply, an indicator of future inflation, reached 21.8pc in August, up from 20.85pc in July, according to monthly data released by the Saudi Arabian Monetary Agency (SAMA).
M3, the broadest measure of money circulating in the economy, hit 885.77 billion riyals ($236.2bn) at the end of August, compared with 727.15bn riyals a year earlier, SAMA said.
Demand deposits, the largest component of M3, recorded a 1.95pc month-to-month fall in August, its strongest decline in at least a year and a second monthly drop in a row, to 342.31bn riyals, which was its lowest level since April of this year.
But time and savings deposits, the second largest single component of M3, climbed to 318.38bn riyals in August, up 4.6pc from July.
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