Annual growth in Saudi Arabian money supply, an indicator of future inflation, eased slightly to 21.3 percent in June from 21.6 percent in May, central bank data showed. M3, the broadest measure of money circulating in the Saudi economy, hit SR860.7 billion ($229.5 billion) at the end of June compared with SR709.3 billion a year earlier, the Saudi Arabian Monetary Agency (SAMA) said in a monthly report on its website. Demand deposits grew an annual 32.1 percent in June to SR351.55 billion versus an annual 30.6 percent rise in May, the data showed. Narrow money, or M1, rose as a result to SR429.15 billion in June up from SR333.11 billion a year earlier. Inflation in the world's largest oil exporter, which pegs its riyal currency to the dollar, hit 10.4 percent in May as price rises accelerate across the region. Dollar pegs in most Gulf Arab states have compelled regional central banks to track seven US interest rate cuts since Sept. 18, even though their economies are booming on a near seven-fold rise in oil prices since 2002. SAMA has raised bank reserve requirements four times since November to 13 percent from 7 percent.
