Saudi Arabian M3 money supply growth accelerated to 3.4 percent in June, the first time its pace has increased since September, the central bank said on its website on Tuesday. M3 supply growth, which serves as an indicator of future inflation, quickened from 2.6 percent the previous month. It reached a record high of 26.2 percent in February 2008. M1 money supply growth, a narrower measure that excludes longer term deposits and money market funds, accelerated to 21.2 percent from 17.8 percent in May, the Saudi Arabian Monetary Agency (SAMA) said. M2 money supply growth, which includes time and savings deposits, rose to 6.9 percent from 5.8 percent. The Kingdom is spending $400 billion over five years, starting in 2009, to strengthen the economy and help finance infrastructure projects. Meanwhile, the country's foreign securities investments jumped by nearly SR73 billion in the first half of 2010, SAMA data also showed. However, the Kingdom's bank deposits with foreign banks plunged by nearly SR40 billion in the same period. Overall assets gained about SR37 billion in the first half despite a surge in the country's public spending as part of counter-crisis stimulus measures. From around SR1,071 billion at the end of 2009, SAMA's investments in foreign securities soared to nearly SR1,144 billion at the end of June, SAMA said in its June bulletin. But bank deposits slumped from a record high of around SR335.6 billion to nearly SR295 billion in the same period. The surge in securities investment boosted SAMA's overall assets from around SR1,570 billion at the end of 2009 to nearly SR1,607 billion at the end of June, the report noted. Overall assets had swelled in most months of the first half but declined in June from the previous month's SR1,611 billion. The fall was mainly in foreign securities, which dipped by nearly SR9 billion as bank deposits abroad gained about SR5 billion in June.
