JEDDAH, 27 August 2007 — Total foreign assets of commercial banks in Saudi Arabia rose by 8.4 percent to SR154.5 billion ($41.2 billion) during the second quarter of this year, the Saudi Arabian Monetary Agency (SAMA) said.
The SAMA report, which highlighted major economic developments in the Kingdom during the first half, also pointed out that market capitalization of shares on the Saudi bourse went down by 6.8 percent to SR1,113 billion ($296.8 billion).
“During the second quarter of 2007, the average cost-of-living index increased by 0.19 percent, recording an annual rise of 3.0 percent,” the report said.
The index for foods and beverages dropped by 1.3 percent, fabrics, apparel and shoes by 0.9 percent, transport and communications by 0.2 percent, and education and entertainment by 0.3 percent.
On the other hand, the index for renovation, rent and fuel rose by 2.9 percent, medical care went up by 0.3 percent and goods and other services by 0.9 percent.
The SAMA said broad money (M3) rose by 4.6 percent to SR709.3 billion, compared to an increase of 2.6 percent during the first quarter of this year.
During the second quarter, SAMA continued to pursue a monetary policy aimed at maintaining price stability and supporting domestic economic activity.
The agency did not make any change on the official interest rates during the reporting period and continued to maintain the official repo rate and reverse repo rate unchanged at 5.50 percent and 5.00 percent, respectively.
“The differential between the riyal and dollar deposits for a three-month period went up to 32 basis points in favor of the dollar at the end of the second quarter of 2007 against 29 basis points in favor of the dollar at the end of the first quarter,” the report said.
The Saudi riyal maintained its exchange rate stable in the spot market at around the official parity rate of SR3.75 per dollar.
The report further said total bank deposits went up by 4.8 percent to SR642.3 billion during the second quarter, while the ratio of total bank deposits to total broad money supply stood at 90.6 percent.
Total claims of commercial banks on the private and public sectors rose by 4.8 percent to SR672.3 billion in terms of credit and investment. Their total claims on the private sector increased by 6.1 percent to SR511.6 billion.
Total bank credit by economic activity rose by 5.8 percent to SR532.1 billion during the first six months of this year against a 1.2 percent increase in the first quarter.
Bank credit during the period showed that credit extended to transport and communications went up by 10.8 percent, agriculture and fishing by 8.5 percent, water, electricity and other services by 38.6 percent, commerce by 8.2 percent, manufacturing and processing by 9.0 percent, services sector by 2.6 percent, financing sector by 5.0 percent, building and construction by 11.9 percent, public and quasi-public sectors by 3.5 percent and other activities by 2.4 percent.
The report indicated that the capital and reserves of commercial banks went down by 2.8 percent to SR106.1 billion during the second quarter of 2007. However, their profits rose by 2.3 percent to SR8.0 billion in the period covered.
The report also referred to the Saudi Riyal Inter-bank Express System (SARIE) that revolutionized electronic banking business and commercial transactions in the Kingdom. The value of total transactions carried out through SARIE amounted to SR8,500 billion during the second quarter. At the same time, total operations executed via SPAN (Saudi Payments Network) amounted to SR36.9 billion. The number of ATMs stood at 6,850, while the number of cards issued by domestic banks exceeded 10.4 million, the report said.