The loan-to-deposit ratio at Saudi banks continued to rise in August hitting a 12-month high, according to researchers.

The latest Saudi Chartbook from Jadwa Investment said bank deposits declined slightly in August, owing to a further fall in foreign currency deposits.

It said time and saving deposits recovered some of the previous month’s losses while demand deposits were broadly unchanged.

The report said growth in bank lending to the Saudi private sector slowed in both monthly and year-on-year terms for the third consecutive month in August.

With banks' holding of treasury bills also falling, banks deposits at Saudi Arabian Monetary Agency beyond the statutory requirement rose to a three-month high.

According to the Jadwa report, data points to a clear slowdown of the economy in August, which was caused by the coincidence of Ramadan, Eid Al-Fitr and the peak of the summer holiday season.

It said indicators of consumer spending and cement sales fell to their lowest levels in more than a year.

The report said year-on-year inflation eased in August, primarily due to a fall in food and rental price inflation. Our measure of core inflation was unchanged.

Eid Al-Fitr and the peak of the summer holiday season pushed inflation for restaurants and hotels and home furniture up while other components of the inflation basket slowed in August.

The report said trade flows in July were affected by Ramadan, with both imports and nonoil exports falling. Nonetheless, imports over the first half of the year are well above where they were last year; nonoil exports are slightly higher for the same period.

New letters of credit suggest a further fall in imports in the coming months, Jadwa Investment.

The Tadawul All-Share Index bucked its previous month fall to rise 2.6 percent, buoyed partially by positive global sentiment as the US Fed unexpectedly decided to delay a tapering of its asset purchases, though it underperformed many regional and global markets owing to heightening regional political tensions.

Thirteen of the 15 sectors are up and two down in September. Multi-investment leads the gainers while seasonal factors pushed the agriculture and food and cement sectors down.

The report said oil prices recorded an elevated average in September. Political tensions in the Middle East added a risk premium to prices that were also being inflated by disruptions to supply.

It said the Kingdom’s oil production was near a 24-year high in July and August, generating bumper oil export revenues.

The report said movements of major currencies over the past month have been driven by the Federal Reserve’s surprise decision to postpone tapering of its bond-buying program, while fear of US government shutdown will put further pressure on the US dollar. GCC financials eased pressure on the Egyptian pound, the Jadwa report said.