RIYADH, 26 March 2003 — The governor of the Saudi Arabian Monetary Agency yesterday denied any capital flight from the Kingdom as a result of the US-led war on Iraq, saying the liquidity level was high.
“No capital or funds have left the Kingdom. In fact, funds have come back,” Hamad Al-Sayari told the press.
“Funds are returning to the Kingdom, especially after improving the investment climate,” Sayari said. “Funds no longer want to leave following economic reforms.”
Liquidity has been steadily growing at Saudi banks, Sayari said. “There is no restriction on the movement of funds and still cash flow is high and so are deposits.”
Liquidity at the 10 Saudi commercial banks at the end of January rose to $102 billion, a growth of 0.5 percent from the close of 2002 level of $101.5 billion, according to the latest report by SAMA.
Money supply finished last year 15.2 percent higher on the 2001 level of $88.1 billion, the largest increase in one year, due to the repatriation of Saudi funds from abroad.
Liquidity levels had risen five percent in 2001 and average growth between 1996 and 2001 was 5.5 percent.
Bank deposits increased slightly at the end of January to $87.6 billion from $87.5 billion at the end of 2002.
Deposits surged 16.7 percent at the end of last year compared with $75 billion at the close of 2001.
