Saudi Arabia’s liquidity has experienced substantial growth, rising by 7.8 percent by the end of September 2025. This increase equates to SR 228.7 billion, bringing the total liquidity to SR 3.2 trillion, up from SR 2.9 trillion during the same period in 2024, according to data released by the Saudi Central Bank (SAMA). The expansion signals continued positive momentum in the Kingdom’s financial sector.
The growth was observed across both annual and shorter-term periods, with domestic liquidity increasing by SR52.3 billion, or 1.7 percent, in the third quarter of 2025. Monthly gains were also reported, with a SR20.4 billion, or 0.6 percent, rise compared to the end of August 2025. This sustained increase in available funds is a key indicator of economic health.
Understanding Saudi Arabia’s Increased Liquidity
The surge in liquidity is largely attributed to an expansion of the broad money supply, known as M3. SAMA’s monthly statistical bulletin details the composition of this growth, offering insights into where the increased funds are being held within the Saudi economy. This growth comes as Saudi Arabia continues to diversify its economy away from oil, attracting foreign investment and boosting domestic activity.
Components of the Money Supply
Demand deposits were the largest contributor to the overall increase, accounting for nearly 47 percent of the total SR 3.2 trillion, or approximately SR 1.5 trillion. These are funds readily available for withdrawal by depositors.
Time and savings deposits followed, representing 36.3 percent of the total, or SR 1.2 trillion. These deposits typically have a fixed term and earn interest.
Other quasi-monetary deposits, including foreign currency holdings by residents, letters of credit, and repurchase agreements, reached SR 304.4 billion, contributing 10 percent to the total. Currency in circulation outside of banks accounted for the remaining 7.5 percent, totaling SR 237.3 billion.
It’s important to understand the different measures of money supply. M1 includes currency in circulation plus demand deposits, while M2 adds time and savings deposits to M1. M3, the broadest measure, encompasses M2 plus other quasi-monetary deposits. Analyzing these different levels provides a comprehensive view of the money available in the Saudi economy.
The increase in liquidity is also linked to government spending initiatives outlined in Vision 2030, Saudi Arabia’s long-term plan for economic diversification. These initiatives aim to stimulate non-oil sectors, such as tourism, technology, and manufacturing, requiring increased financial resources.
Furthermore, higher oil prices in recent periods have contributed to the Kingdom’s financial reserves, indirectly boosting liquidity. The government has benefited from increased revenue, allowing for greater investment and spending. However, the reliance on oil revenue remains a factor, and diversification efforts are crucial for sustained growth.
The growth in domestic liquidity also reflects the increasing confidence of investors and businesses in the Saudi economy. This confidence encourages greater financial activity, including lending and investment. The Kingdom has been actively working to improve its investment climate, attracting both domestic and foreign capital.
The Saudi banking sector has played a vital role in facilitating this growth. Banks have increased lending to businesses and consumers, contributing to the expansion of the money supply. The sector’s stability and efficiency are essential for supporting the Kingdom’s economic development.
The impact of this increased liquidity extends to various sectors of the Saudi economy. Real estate, for example, has seen increased investment activity, while consumer spending has also benefited. However, SAMA will likely monitor the situation to prevent potential inflationary pressures.
Related to this growth, the Kingdom has also seen an increase in foreign investment, further bolstering its financial position. This inflow of capital is a testament to the success of Vision 2030 and the attractiveness of the Saudi market.
Another key indicator is the growth in credit to the private sector, which has been steadily increasing alongside the rise in liquidity. This suggests that businesses are optimistic about future prospects and are willing to borrow to expand their operations.
The Saudi Central Bank (SAMA) is expected to continue monitoring these trends closely and adjusting monetary policy as needed to maintain economic stability. Future reports will provide further insights into the sustainability of this growth and its impact on inflation and other key economic variables.
Looking ahead, SAMA’s next monthly statistical bulletin, expected in December 2025, will provide an updated assessment of liquidity levels and money supply growth. Analysts will be watching for any signs of a slowdown or acceleration in these trends, as well as any changes in the composition of the money supply. The ongoing geopolitical situation and global economic conditions will also play a role in shaping Saudi Arabia’s economic outlook.
