RIYADH, 28 December 2002 — Government spending and bank loans to the private sector are noticeably on the increase in the Kingdom in the wake of a liquidity boom.
According to a recent report of the Saudi Arabian Monetary Agency, money liquidity grew by 14 percent compared to last year to reach SR374 billion in November. In the same period last year the figure stood at SR328.2 billon .
Bankers attribute the continuous increase in liquidity to several factors such as falling confidence of Saudis to invest in foreign countries combined with a steady decrease in returns from international investments. Another reason is the success of the campaigns by local banks to attract money for local investments.
A Saudi banker said increased liquidity would have positive impact on bank credit being extended to companies. It will also provide an impetus to the equity market, he added.
