Annual growth in Saudi Arabia's M3 money supply slowed for a sixth straight month in March and private sector lending stepped up its recovery as banks cast aside fears about the soundness of local firms. M3, one factor potentially influencing inflation, grew 4.6 percent in March year on year, down from 5.6 percent in February and 8.3 percent in January, due mainly to a 12 percent drop in time and savings deposits, data published by the Saudi Arabian Monetary Agency (SAMA) showed. In February, time and savings deposits fell by almost 10 percent year on year. Demand deposits, a more liquid component of M3, rose by an annual 20 percent in March after adding more than 21 percent in February. Analysts believe private firms and individuals have been injecting money into the economy from savings deposits. Annual inflation in Saudi Arabia inched up to 4.7 percent in March after it accelerated to 4.6 percent in February, its highest level since June. SAMA data showed that bank claims on the private sector - which measure lender confidence in the economy's prospects - rose by an annual 2.4 percent in March versus a 1.6 percent annual rise in February. Compared to their level the previous month, bank claims on the private sector rose by 0.5 percent in March. That is almost half their monthly growth in February, which was their highest month on month jump since August.
